Add more soft dunks. NBA Live 2001 had its share of problems, but one of its great features was dunk animations. Add these to the more powerful and spectacular array of dunks in NBA Live 2003 (retaining the less powerful dunks from Live 2003 as well).
Reduce frequency of dunks. In NBA Live 2003, players who can dunk throw it down too often. NBA Live 2002 was fairly realistic in this regard, though post players dunked too often. Perhaps make a player's dunking frequency (and probability of making dunks) also rely on how tired the player is.
Improve blocking of dunks and layups. Blocks in general need to be improved, but this is one area in particular I feel should be addressed. I don't mean the old days of NBA Live 96 (easily block a dunk or layup, just stand in the lane and press jump) but the inability to block layups especially accounts for too many easy points in the paint. Similarly, the ease of executing a dunk makes interior defenders useless. Obviously blocking a dunk should not be easy, but shotblockers should prevent players from being able to easily execute a dunk (and make it).
Restrict dunk package in 5 on 5 mode. Between-the-legs dunks and behind the back dunks look cool, and are great for rubbing it in during 1 on 1 or as an easter egg in Practice Mode, they're not all that frequent in NBA games. Additionally, the more difficult and spectacular dunks should be harder to execute, and more easily missed in traffic. NBA Live 2003 has a fairly good dunk selection, but at times the players are a little unrealistic in their execution of dunks (360s in traffic, etc.)
Remove the crashing sound effect. Superficial I know, but I thought I'd mention it anyway, as it does make the game arcadeish.
Though dunks and layups are a small element of the game, I feel that these issues (well, the first three) are contributing to the high scores that we realism fans get irritated by - though I'll admit, they can make the game fun (especially 2 player games), so perhaps leave them in as an Arcade Mode.