Borrowing (stealing, pick pockets 85%) ideas

I'm a huge fan of James Maliszewski's Grognardia. It's a blog ostensibly about old school pen and paper RPGs. And while I've never played any form of D&D older than AD&D, but reading Jame's blog sometimes makes me wanna give it a shot.

Anyway, recently James attended an old school convention and in addition to running two games of his own campaign setting, he also played some AD&D. I'll now quote directly from James' blog:

Before we began, Ed had two rules for us. First was a purely practical one: don't split the party. Second: anything that came out of our mouths came out of our character's mouths, unless it was something obviously rule-related, like "I rolled 15." These rules were fine by me, even the second one, which had the effect of both limiting unnecessary chatter and ensuring that everyone involved made at least a minimal effort to roleplay. I've never seen the need to adopt anything like Ed's second rule and my experiences refereeing Dwimmermount at OSRCon only confirmed me in that opinion, but I don't begrudge him the rule. I'm sure it's one that arose after many years of running con adventures.

 In theory, I'm a great fan of both rules, the second more so than the first.
There's a tendency with players not used to heavy roleplaying (and even some veterans, I myself am guilty of this, to my eternal shame) to utter the words, "My character says X" Where X is dialogue best actually spoken by the player while "in character".
As a player, part of the fun should be acting like someone else and as a player, you cheat yourself every time you treat dialogue as a mechanic instead of a special part of the game. As a game, pen and paper RPG's are one of the few games involving dialogue where you don't have choices made for you.
Take for example the Mass Effect series (of which I am a HUGE fan). It's a dramatic space opera wherein you assume the role of a space marine badass. I'd say that about half the game consists of dialogue between characters, but at most you have six dialogue options.

Six.

In D&D, when the local barback asks you about your adventures, you have unlimited options. When you respond to his question with, "I tell the barback of my adventures." The barback's standard reply will likely be based on his feeling towards adventure and adventurers. However, should you roleplay out the retelling of your latest foray into the kobold tunnels, you can make yours  sympathetic tale, or boast loud and long of your heroic deeds, give an honest account, tell a bold-faced lie, or be coy, or whatever else you can think of.

Not only does in-character dialogue provide a way for you to take control of a situation, but it also makes the game more fun and enjoyable for everyone. Some of my most memorable moments in gaming have been interaction between players and NPCs that didn't involve a single dice roll, but simple dialogue.

The next session I DM, I'll be offering my players a 10% experience bonus if they keep strictly in character.