In the aforementioned story-I’m-writing-with-Aud, there’s this exchange of dialogue...
“You should wear mascara,” I say, almost absentmindedly. I’ve said it before.
“I abstain for the greater good,” Nora returns. “The public just couldn’t handle it. Mascara and rectangle glasses, it’s a deadly combination.”
Just from this the reader has a sense of Nora’s character. There are some physical details that pop up; Nora wears rectangle glasses and probably has very pretty eyes, but light eyelashes. Also, Nora is witty and on the sarcastic side. In addition, there’s an idea of her relationship with the narrator—they’ve known each other for a while, probably are good friends, and are used to bantering.
That’s just one example of how awesome dialogue/dialogue tags/any conversation between characters can be. It’s generally showing-not-telling, giving a lot of information about characters--the best part!--and it’s more fun to read, anyway.