the general rule for dialog (dialogue?) is that each new speaker is a new paragraph, right? so... if i wanted to say something like this:

Matt twiddled his thumbs for a bit and then replied, "blablablablabla..."
Sherry hesitated a moment, and asked, "blablablabla?"

is that right? or can i leave it all as one paragraph? or is this a bad rule in general?

help is much appreciated! :D