example dialogue system for love2d based on coroutines - runnable love file prepared here: https://www.dropbox.com/s/0n6vs634jzlk266/dialogue_co.love

dialogue.lua

--dialogue type

local dialogue = {}
dialogue._mt = {
	__index = dialogue,
}

function dialogue:new(f)
	return setmetatable({
		f = f,
		txt = "",
		options = nil,
		option_selected = nil,
	}, dialogue._mt):reset()
end

function dialogue:reset()
	self.co = coroutine.wrap(self.f)
	self.done = false
	return self
end

function dialogue:next()
	--finished?
	if self.done then
		return
	end

	--collect input
	local input = nil
	if self.options then
		input = self.option_selected
	end
	--actually run the coroutine
	self.txt, self.options = self.co(input)

	--reset selection
	self.option_selected =
		self.options and 1
		or nil

	--detect done (happens when control falls out of the dialogue routine)
	if self.txt == nil then
		self.co = nil
		self.done = true
	end

end

function dialogue:keypressed(k)
	if self.options then
		--option toggle
		if k == "up" then
			self.option_selected = self.option_selected + 1
			if self.option_selected > #self.options then
				self.option_selected = 1
			end
		elseif k == "down" then
			self.option_selected = self.option_selected - 1
			if self.option_selected < 1 then
				self.option_selected = #self.options
			end
		end
	end

	local select_pressed =
		k == "space"
		or k == "return"
		or k == "z"
	if select_pressed then
		self:next()
	end
end

function dialogue:draw()
	local lines = {
		self.txt,
		"",
	}
	if self.options then
		for i,v in ipairs(self.options) do
			local s = v[1]
			if i == self.option_selected then
				s = "> "..s
			end
			table.insert(lines, s)
		end
	end
	for i,v in ipairs(lines) do
		love.graphics.print(v, 10, i * 10)
	end
end

--functions to use in dialogue
function say(str)
	coroutine.yield(str)
end

function ask(str, options)
	local res = coroutine.yield(str, options)
	local opt = options[res]
	local f
	if type(opt) == "table" then
		f = opt[2]
	end
	if type(f) ~= "function" then
		error("bad response")
	end
	f()
end

return dialogue

main.lua

local dialogue = require("dialogue")

local d
function love.load()
	d = dialogue:new(function()
		say("look ma, i'm talking!")
		say("all sorts of separate lines")
		say("written like it's totally linear declarative code")
		local res = ask("isn't that great?", {
			{"yes", function()
				say("yeah, it's great!")
			end},
			{"no", function()
				say("well, heck to you too then.")
			end},
		})
		say("bye!")
	end)
	d:next()
end

function love.keypressed(k)
	if d.co then
		d:keypressed(k)
	else
		love.event.quit()
	end
end

function love.draw()
	d:draw()
end