Dialect can be useful for creating character. It gives the character their own unique voice, and it enables the reader to "hear" the character in a more "real" way. Dialect can be used to give the reader clues as to the setting of the story, and it can even be used to highlight differences between characters.
Consider, for example, "The Revolt of 'Mother.' " Sarah and her family speak using a dialect that is indicative of rural living; for example, they run words together and drop g's and other letters. Moreover, their grammar is unconventional. The minister, on the other hand, speaks in complete sentences, using standard English and completely enunciated words. This marks him as being more educated and "citified."
As useful as dialect can be for developing and distinguishing characters, it can also sometimes be distracting to the reader, who may get lost in all the apostrophes and nonstandard grammar and spelling. For this reason, dialect is best used sparingly and carefully so as not to push the reader out of the story.