The problem with dialog trees, besides the fact that they take 9x as long to write and code, is that they don't really go much of anywhere and no one ever uses them because they don't really take you anywhere.
It takes an exceptionally manic person with a severe case of OCD and MPD to craft genuine dialog trees with viable choices with absolutely different resolutions for each branch along the way for them to be worth the effort. As such, I have yet to see any game, whether MMO or stand-alone, that used dialog trees effectively (I think Black Isle's RPGs and Lionhead's Fable came the closest and those were still weak and lame).
They really are a great idea in theory, but in practice they aren't such a good use of time, although it would be a welcome addition if ever they were easily created with a dozen different outcomes from reasonably feasible dialog choices.
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