This session was one of the more densely crammed ones of this year's GDC; the material covered could easily have been expanded to fill an entire day's tutorial. Despite the rapid pace, David Freeman did a superb job of expressing his ideas for what makes game dialogue great.
Synopsis Here is a brief taste of what was covered; for interested readers, purchasing the audio recording of the session is very highly recommended. Additional resources are also available at FreemanGames.com.
Avoid "A-B-A-B" dialogue - boring exchanges where one character delivers his line, then the next, and so on.
Play on subtext - sometimes the most important things are best left unsaid.
Characters should each sound like a unique person; if everyone speaks identically, the impact is lost.
Explore multiple facets and aspects of each character; bring out various sides of a person as she speaks.
Try to capture the rhythms of natural speech - interruptions, trailing off without finishing a sentence, stammering, pausing to search for words; these touches are very non-intuitive but dramatically improve believability.
Be surprising. Consistently introduce small twists and unexpected turns in conversations. For example, don't just have a character eat everything in the refrigerator - have him eat everything even the stick of butter.
Reveal the relationships between characters as well as how they feel about each other. Again, this is best done through subtext and should be "read between the lines" rather than explicitly stated.
Final Takeaway Freeman presented a solid repertoire of invaluable techniques for improving and polishing the dialogue of any game - or any written exchange at all, for that matter.