"How is dialogue different than conversation?" As with so many things, the answer is purpose. Conversation can simple by talking for its own pleasure, or to enjoy the company of the other person. Dialogue needs a purpose. To inform, or misinform. To evade. To distract. To compell, to terrify. To play for time. To express an emotion, or conceal it. All purposes that can underpin dialogue. Dialogue without purpose? That's just asking to be rewritten.

David, you and I are in total sync. The screenwriting principle I use and teach is Dialogue = Purpose. Works on so many different levels.

i remember hearing a director at a script reading say "drama is life distilled, not life reproduced". And I think the same applies to dialogue. It's normal conversation distilled down to the important bits. While still giving the impression of being 'real'.

Yes, like Joseph Mankiewicz said: "There is no such thing as realistic dialogue. If you [simply recorded] the real conversation of any people and played it back from the stage, it would be impossible to listen to. It would be redundant . . . . The good dialogue writer is the one who can give you the impression of real speech."