Dialogue should offer a sense of character. How you do this is up to you. Anyone who's read Dickens will know he goes to great lengths to spell things phonetically when creating accents for characters of lower class. It certainly makes you focus on what's being said because you need to really pick words apart to realise what's being said. Sometimes it works, other times it becomes cliched and very tiresome.
I think gentle touches are the way to go. Slang is good, and I love to read slang from other cultures (and confuse non-Brits with ours :P). If you've got an angry character, you can show it through snappy, harsh words and words not being properly finished. A dreamy character may ramble a bit. Maybe your character is nervous and stutters. Maybe they're drunk and slurring. Consider experimenting with dialogue! How they speak and the words they use can help create a personality.
I've experimented with phonetic speech and got really fed up with it because it's hard to keep it up. I'm all about little touches here and there. Imagine if I wrote every blog post phonetically! You'd all get fed up, coz I dun' auways say my "t's" an' I only use "g's" at the end words if I'm typin' 'um.