The difference between verse and prose, or iambic pentameter and normal writing, is one that is easily identified on the page, as the prose simply runs until the end of one line and then continues onto the next without any break. Verse, or iambic pentameter, runs only for approximately ten syllables, and so it does not continue until the end of the page and a blank gap can be seen. Shakespeare in his plays uses prose to write the words of lowly characters and the sub-plot. This is why Feste's conversation with his mistress is written in prose, as although Olivia is clearly a member of the main plot and the upper class, at this point she is talking to Feste, the fool, and they are engaging in wordplay. The change shifts to verse when Olivia receives Viola, who brings her new protestations of love from Orsino:
Give me my veil. Come, throw it o'er my face.
We'll once more hear Orsino's embassy.
The shift reflects the more dignified role that she must play as lady of the house in receiving Orsino's messenger. However, interestingly, when Viola begins to deliver her message, she breaks into prose when she discusses which lady is Olivia and talks of the work she put into delivering her speech. The switch between prose and poetry in this scene seems to highlight the contrast between artifice and real emotions. Viola stresses again and again the "pains" she put into writing the speech, and this is something that undercuts the power of her rhetoric. This is something that Olivia herself is very aware of.
When looking for the dialectical shift between the prose and the poetry, you need to look for wherever each individual line begins with a capital letter.
For example, this paragraph would be prose because as I move to the next line, the word "move" isn't capitalized. Also, the character speaks in an entire paragraph without any lines breaking or any "odd" words, such as "if" or "Or," being capitalized.
However, when trying to find the poetry, each line may have a different capital letter and they won't be written in paragraph form.