Dialogue is pretty easy to invent. Most people spend plenty of time imagining future conversations and recalling past ones. It's a short step to imagining conversations between characters. It's when it comes to writing them down that difficulties arise.
Various style guides will give you invaluable aid in laying out your dialogue* on the page, and there are all sorts of conventions about acceptable proportions when combining speech and non-speech in the same paragraph and what-have-you.
The most common difficulty seems to lie in maintaining the pace and flow of a natural conversation when reading, while at the same time giving indications of tone, gesture and other nonverbal communication, not to mention ensuring that the reader doesn't get confused as to who is speaking.
In French, there is a convention which while it is somewhat vertigo-inducing the first time, does away very nicely with all these problems at once:
Armand and Philippe were sitting outside their favorite café on the Champs-Elysées as usual when their attention was caught by the appearance of an elderly lady with a small dog, followed closely by a leggy blonde with a huge alsatian.
- they are together, those two, do you think ?
- I do not think, Armand my friend, I only observe ?
Armand, gently teasing
- but what do you observe, Philippe my old chum ?
- Sultan and César are taking their ladies to the park.
Unfortunately this convention, present in French for at least a century, is not available in the English speaking world - though I'll get behind anyone who wants to use it.
Writing in English, you have to say who said what and how they said it.
Now a whole lot of you will have been enjoined by your English teachers to avoid "said", and use something "more interesting" or "more descriptive". Others will have told you to "use adverbs".
"They are together, those two, do you think?" Asked Armand.
"I do not think, Armand my friend, I only observe," Philippe replied.
"But," Armand continued in a gently teasing tone, "what do you observe, Philippe my old chum?"
"Sultan and César are taking their ladies to the park," Philippe smugly concluded.
How much do those complements really add? We know the first line is a question, even without the questionmark. What Philippe says can only be a reply, Armand then continues his earlier thought and Philippe concludes the dialog with a rather weak joke. These words are almost completely redundant - they are there only to hang something else onto. The first one tells us who speaks first, and the third and fourth enable us to attach some color.
Those aforementioned English teachers would probable have been disappointed that we didn't say inquired, reposted, insisted and declared, but these would have been no less redundant, and more than a little distracting. Indeed, the more you search for alternatives to "said", the more distracting it becomes, and the more your characters sound like schoolgirls in something by Elinor Brent-Dyer or Frank Richards. And not for nothing, since Frank Richards often used this for comic effect, though he was equally capable when using plain old said with adverbs. Notice especially the use of "repeated" in the second example, and why it isn't redundant.
So here at last are Philippe and Armand as I originally wrote them:
Armand and Philippe were sitting as usual outside their favorite café on the Champs-Elysées when their attention was caught by the appearance of an elderly lady with a small dog, followed closely by a leggy blonde with a huge alsatian.
"They are together, those two, do you think?" said Armand.
"I do not think, Armand my friend, I only observe,"
"But," Armand leaned forward, with the beginning of a smile, "what do you observe, Philippe my old chum?"
"Sultan and César are taking their ladies to the park."
In conclusion, if conclusion there be, I think there is a place where Janet can justifiably expostulate, but much of the time nametagging isn't even necessary, and when it is, said will generally do.
* I use the UK spelling to differentiate between: dialogue - discussion or conversation and a dialog: an educational roleplaying exercise or political/diplomatic exchange. This may be a little fussy of me but it acts as a landmark.