Jan, excellent lessons on dialog! So true, everything you've said!
I love writing dialog, and my favorite parts of my own fictional writings (not for the Challenge) are very dialog-heavy. It's made the Challenge more of a challenge for me, in fact... because by the time I've done all I need to do to create a coherent story, there aren't many words left for dialog. The dialog portions always get sliced and diced in the editing--which isn't necessarily a bad thing.
It takes some work to get dialog and dialog tags to sound just right. Often I have to read a section of dialog many times before I feel good about it. Invariably, the next time I look at it, I'll change something that sounds awkward.... and change it again. (I'm much more easily satisfied with my descriptions, because I know they're never going to be very good...
Here's an excerpt from my unfinished NANO novel (36,362 words--R.I.P.):
“If it is any consolation,” said the older man in a low voice, “I would have chosen differently for her.”
Charles swallowed. The words pierced like daggers.
“When your brother came to Louisiana, I hadn’t met you.”
“But after you had...?”
“My friend, do you really think I needed to be away from home those two days? I thought perhaps, if you and she were together...”
“It wasn’t that,” Charles said bitterly. “All this–-the land, the house-–belongs to Mark, not me. I’m only a schoolteacher.”
I tend to leave out dialog tags whenever possible (sorry... next week's lesson, I know!). When I do use them, I like to use "said" most of the time. I often separate sections of dialog with action (to remind readers of the identity of the speaker). But sometimes I do use adverbs (as in "bitterly", above). Not all the time--just when it they seem to be needed, to clarify emotional nuances. Hard to explain, but I hope that makes sense!