I've seldom had trouble following dialog in books, so I didn't think much about it until a group of struggling 5th and 6th grade readers enlightened me about the difficulty they had following conversations in print. I asked one a question about which character was frightened. He replied, "It doesn't say." He pointed out the line of text. It read, "I am not following you into that house. It is haunted!" That line was contained in an extended two-way conversation, and only the first two lines contained dialog tags.
We stopped to talk about how the author uses a new paragraph each time the speaker changes. This helps the reader follow the conversation, yet allows it to flow without repetitive dialog tags. Several in the group commented that they had never realized that and always got confused when reading conversations. The book we were reading had two main characters and offered numerous examples of two-way conversations. The students reread several of them and found it much easier to follow.
I realized that day that there is more to concepts of print than what we teach beginning readers. Since that day, I have had several opportunities to help young readers improve their comprehension by teaching them how to follow dialog.