Bad dialog can kill a great book or screenplay. When I run across terrible dialog, I literally cringe and grit my teeth. In fact, when I receive submissions loaded with bad dialog, that alone can kill my interest. What constitutes weak dialog? Here are some tips.
Everyone sounds the same. What happens is that every character sounds alike, which is really a problem of the author's voice is being applied to all of the characters. I've read books where you could tell the difference between the dialog and the narrative. Your characters each have to have their own voices. A great technique to solve this problem is to find words or phrases one character constantly uses while the others don't use at all. Something as simple as making one always use profanity while the other one does not (of course the profane dialog needs to also apply to the right character and demographic of that character). In my book California Girl Chronicles, Kale, a main love interest, always calls her by his term of endearment, "sweetheart". None of the other guys call her that. It's a simple technique and subtle, because if it's well written most readers should not be distracted by it but rather accept that it's natural for that character to talk that way.
Find a model to write against. Find a person you know or even an actor you would intend for the role and write the dialog the way that person talks. I use both people I know and actors. In the script Beauty School, we used Dane Cook's voice to write Chaz. I've seen Cook's stand-up routines enough to know how he talks and gestures. In my book, California Girl Chronicles, I used several people I know as frameworks for the love interests and Alexander Skarsgård (from watching interviews not from watching his characters) to write the decent, sweet producer Kale. This technique also helps you create each character's physicality. The best way to think about is how would these people talk or behave if put in your imagined situations.
Fact or Fiction. I get asked all of the time whether or not Brea from California Girl Chronicles is me. Here is the truth. Fact is always more interesting than fiction. Some of the conversations she has that sound crazy and out there did come from some crazy conversations I've had. Certain scenes in the screenplay Beauty School were based on some real-life experiences. Is Brea me? No, but of course some parts of her exist within me, as I'm her creator. By using real experience and listening to people talk, it helps you to create three-dimensional worlds where your characters have their own voices. Most writers pull a little from their lives to create their stories. I like to think of it as taking a small seed of truth, planting it, and letting it grow from my imagination.