As I said, the psyche in an audition is very weird, so do what you can to avoid the sense that you're power-tripping on anybody. The key is to let them know that you know that this is an awkward process, but that you're both there for an artistic purpose; that art is big and you are small. Don't let your shyness make you grim and give the false impression that you're just going through the motions. Let them know you're all about creativity. You don't have to be jovial and goof around; that can actually make things worse because the power is jiggered in such a way that you're requiring them to laugh at your jokes, and they might not be humorously inclined at the moment. As far as that goes, make it plain there's no pressure of any kind that your actors have to be peppy and personable with you during any pre-reading meeting; especially if the emotional values in the scene are heavy. It may seem a bit unnatural, but I'd suggest that if you want to get a feel for the kind of person the actor is, and you should, that you do your chatting after they've finished acting.
With regards an actor's personality, when the time comes to pull the casting trigger, you ought to be clear about whether you're more interested in having a fun person around who gives a good meeting, or if you want to make the best movie you can make with someone who's maybe not a laugh riot. If it's the better movie you want, it means you'll have to avoid the natural attraction to the personal and keep your eye on the mission. That means chummy or not, somebody you'd like to shine good fortune on or not, you pick the actor who's going to kick ass in the part. Having said this, I will now immediately contradict myself and stress how crucial it is that you to be sensitive to the way an actor comes across as a person. Be highly attuned to any red flags that indicate personality quirks, such as foulness of temper, resistance to authority or irresponsibility; qualities that can be disastrous on a low budget film. Ask yourself if you feel like this person would knock down a wall for the overall good of your project.
Although it might be better to have another actor there in the room doing the readings opposite your job applicants, that's not necessarily true; and you shouldn't feel bad if the person giving the feed lines delivers them in a stilted way. Most actors don't need to work off of a full performance in order to do their thing. They do this by superimposing the reality of the other person's performance in the same way they have to if they're on a sound stage staring at a green screen pretending it's a vista from a mountain top. Having someone give a flat delivery for the feed lines is actually preferable for an actor to acting opposite someone hyped up and over animated (a danger when your reader feels they're auditioning as well) because, in that situation, it's not just having to superimpose a value, it's having to ignore a distraction.
The key objective for you is to get your actors to engage in a creative experience. Talk to them in such a way that they get turned on by the details of the imaginative world they're about to enter. They don't need to hear details about the project, the production or why you wanted to make a movie. If you want to say something about the style you're going for, fine, just say the style might be something like this film or that television show, then get on with it. You don't need to detail a lot of plot points, as if the more information you give them the more they'll connect to the piece. Acting is not an intellectual process. And don't bother them with a diatribe about the inner workings of their character's psyche. Actors can rightly be set on edge by talk like that because it's intrusive to their work and, at times, just plain creepy. Describe their character the way someone who knows that person might describe them. Give them the basic thrust of the scene (if they haven't read the script), and trust they'll do the rest. If you want to communicate something about their character's point view in a scene, do it using visceral and enthusiastic terms: "When you're around him he makes you feel like you have insects on your skin." "You're trying to hide everything." "You'd rather die than lose this fight." "You'd like to bite him." "Get her to hug you." "Make him hurt like you do."
