Source Straight from the horse's mouth
Indie developers Vince D. Weller and Gareth Fouche have written an article which discusses the history and relative merits of various dialogue systems in RPGs posted on Iron Tower Studio's forums
Some have attempted, once again, to create a combination system. Dialogue trees, but ones which allow you to choose the tone with which you deliver the response. Bard's Tale, with it's Snarky or Nice options, Mass Effect with it's persuasion wheel and the upcoming Alpha Protocol which offers you a choice of professional/suave/aggressive secret agent archetype. The problem with such systems is that, being built on dialogue trees, they offer little extra flexibility in the best case, and in the worse actually surprise the player with a response completely outside their expectations
It's an interesting read which covers games from Mass Effect
. If you like essays, RPGs, brandy, and dinner jackets then give it a look.