I think Rex Little got it backwards, unless I missed what the problem is... the results of Choices have to be above the Choice.
The game reads Dialog from Top of the list to Bottom, so answers to Choices have to be above the question.
You can move highlighted dialog with the up/down arrows on your keyboard.
I got this to finally work, but now there's yet another problem. I'm trying to modify another person's dialogue options to be dependent on certain conditions of the previous quest (i.e., whether the previous victim is alive or dead), but I can't get the second NPC to acknowledge this in any way. The "AddTopic" function won't work in this instance, either (unless I'm doing something wrong that I don't know of).
EDIT: Essentially, the dialogue options follow the same formula (more or less). Every time I click on the NPC's name, the NPC is supposed to begin speaking about the modified subject(s) (which, for reasons beyond my understanding, the NPC will not do).
Example:
NPC Name (Conditions: Journal Entry - Previous NPC Killed)
You killed
! I'll have your head for this!
SetFight 100
Goodbye
NPC Name (Conditions: Journal Entry - Previous NPC Spared)
So......You let live. I shall take the same offer you made for , and leave as well.
Goodbye