Chris Conley has now released Threaded Conversation, a much updated and revised edition of the Inform extension I used for Alabaster and Counterfeit Monkey. You can download it here.
Threaded Conversation’s purpose is to create prompted dialogue for conversation-rich games, and to deal with parsing ask/tell input intelligently. It also comes with an extension called Conversation Builder that allows for developing conversation dynamically, the way Alabaster did in its input-gathering stages. Chris has added significant amounts of new work past where I was able to take the project, though: beta-testing, cleaning up code, and in particular revising the icky bit of code that handles parsing input when the player types a conversation command but the conversation hasn’t officially started yet, which has to figure out who’s being addressed and then restart the parsing process afresh once it has the proper context for reading the subsequent speech keywords. (Trust me, this is icky, and it was pretty broken in the code iteration I handed off to Chris.)
I’m very grateful to Chris for taking this over for me at a point where things became too busy for me to keep up, and putting so much of his own thought and effort into it. I hope folks will find it useful.
Emily Short's Interactive Storytelling 
Yay! I hope this will help me through my next project. I’m scared as hell by conversations, but I’d really love to make use of some, someday. It’s school time again…!