Hmm, I was thinking about those morons indicators.
Sounds like "success" and "failure" in the NPC's reaction to your replies is generally frowned upon around here, which makes sense. But that isn't the issue.
One thing I've been pondering is whether or not the actual skill being used really needs to be flaunted. The pro argument, like many have said already, is that the player feels rewarded that the skills s/he has invested in are actually being used.
Now, if, say, one intended to make good and frequent use of these skills in dialogue (as in, not having them be rare occurrences, more an integral part of conversation), would it not make the conversation flow more freely if the player was simply to read through the dialogue choices and interpret properly which ones would require which skill (assuming good writing that will make it obvious, yet subtle at the same time)? Having the [skill] appearing there has the potential to appear a bit "gimmicky" (though, of course, I see the merit of such a design decision).
Looking at VD's example screenshot, a player who takes the time to read and interpret the dialogue choices *should* theoretically be able to realize which one would require streetwise, and so on. However, without the tag sticking there, the flow would perhaps be more fluid. No 'I have to make a skill check here!' feeling from the player's part.
Assuming, again, of course, that the use of skills will be integral in writing dialogue. If it's a rare thing, then making the player feel 'rewarded' would indeed be a good thing. Otherwise, perhaps it would involve the player more by *not* including the tags? It will prompt the player to read through every response and to choose the one most appropriate for his/her character. In this way, it would perhaps even enhance roleplaying. Having it pointed out to the player which choice uses which skills might make the player be a bit lazy sometimes and opt for the one which uses the skills the player invested in, rather than the most appropriate choice. I know I've been guilty of that at times, choosing a dialogue choice BECAUSE it used a skill I had. Then again, that's just me.
Ultimately, both ways seem legitimate, and I personally wouldn't mind playing a game having either option. The advantages of including the skill tags are pretty obvious, as others have pointed out. I was just wondering if the merits of NOT using the tags would be worth it.
And VD, from a mere screenshot which doesn't even reveal much, you have managed to have me interested. If the rest of your game features prominent use of skills and roleplaying, I will indeed be following its progress.