There are thousands of rules when it comes to the use of contractions, verb usage and sentence structure in my Chicago Manual of Style. But where do we go to look for rules on dialogue? What do we do when we are writing in the voice of a street tough from New York? Or a fisherman back in from a run on the Grand Banks? These people don’t speak the same dialect, and they don’t follow the rules in any stylebook.
When we are writing dialogue we need to be true to our characters more so than any grammar rule. In fact it is often better if we ignore the rules entirely and go with our gut. Make your characters speak as they do in our heads – broken sentences, slang and all. Write it, and then read it aloud. Does it sound like someone talking? Better yet, if you have a good stretch of dialogue, have a friend read it with you as if you were reading a play. There is an ebb and a flow to the conversation. Without that rhythm the dialogue will sound forced, and won’t read like a realistic discussion / chat/ argument. Emotion plays a part in this rhythm – anger makes your sentences shorter, desire can lengthen the pace and cause…interesting pauses. 
It’s also important that you are familiar with any special dialect you are attempting to recreate. Here are a couple of resources on dialects that I found interesting:
http://web.ku.edu/~idea/northamerica/canada/canada.htm (Canadian dialects – you can even catch a few audio clips)
http://webspace.ship.edu/cgboer/dialectsofenglish.html (English dialects, a study on how they sound, common slang, etc.)
http://www.rinkworks.com/dialect/ (these are more like parodies or real dialects, but they are really fun and can be inspiring when you type in your original text)
http://www.slangsite.com/ (the slang dictionary)
Have fun and talk the talk.
Nancy