The big idea
Dialogue--characters talking--is the spice that can make a good story become a "WOW!" story. It brings a story to life. It makes the difference between hearing ABOUT what characters are saying and actually having them say it. It makes everything more immediate.
The Bad News:
There are about twelve zillion rules about punctuating dialogue.
The Good News:
You can write pretty good dialogue if you're willing to learn and follow just four of those rules.
How to do it
Here are the four rules:
RULE NUMBER 1: Put quotation marks around anything someone ACTUALLY SAYS.
RULE NUMBER 2: Make a new paragraph each time you switch speakers.
RULE NUMBER 3: Change periods at the ends of quotes to commas IF THE QUOTE IS FOLLOWED BY A "HE SAID" PHRASE.
RULE NUMBER 4: Get a good balance of dialogue and narrator stuff. Dialogue should never take over — narrator stuff can help the reader visualize what is going on in your story.