An example like this one http://www.scirra.com/forum/topic61701.html by Miu3 seems common, especially with those few people I've seen who want to create interactive story books. The dialogue is stored in instance variables on the character objects, and events track which scene you're in. Which is absolutely fine, but the amount of dialogue that needs to go within Construct 2 could end up becoming immense, and get completely out of control. And what if you want to change something? The idea of going through potentially hundreds of events, actions and instance variables and changing them makes me worry that I have to get this right first time!
Then of course there's Aluriak/Yann's example here http://www.scirra.com/forum/npc-dialog_topic48355_post303797.html, where the dialogue is stored in one big splat at the top of the event sheet. Which is also fine, but imagine if the text was a 100 times bigger, and there's many more characters to talk to. Again it'd become a nightmare.
Would it be better if the text was stored externally in another file> This is how I've always imagined it should be, although splitting it away from the logic might make it even more confusing.
There's so many options and I want to know which way is best practice, and most advised. How do you all handle this in your games?