I've only played the demo, but if it's at all indicative of the game the dialog is decent. Again, no Planescape, but there are several encounters throughout the demo dungeon in which you interact with characters. This game does not appear to be just a hack & slash dungeon romp.
However, there is one huge problem with the initial dungeon. Any of you get down to the second level? There are two stairways, whichever you take leads you to an almost impossible fight in which it's entirely possible your party will be wiped before you ever get a turn.
That's not cool at all. I love a challenge, but this isn't a skill-based challenge, it's all luck-based. I have to go down the stairs, reload, go down the stairs, reload over and over just to have my party survive long enough for me to get a turn in. And even then it's usually over. My party starts in a corner surrounded by trolls. The troll shaman instantly silences them all. Two trolls rush in, instantly killing my wizard and severely injuring my knight, all before I get a chance to take a swing.