My character personalities went from pretty much "has a wolf" to like a full page...
One of my players put it this way: A good RPG evening is 1/3 adventure, 1/3 action and 1/3 soap opera. Exploring a creepy ruin for a legendary treasure and killing a bunch of icky monsters on the way is fun, but it just adds another dimension if the characters and NPCs in the group have proper interactions and players don't talk to each other, but in character. Having a proper background and knowing how your character feels about this or that goes a long way.
I like this analogy, I might use it myself. I'm GMing a Pathfinder game at the moment and we're doing a pretty decent job of keeping everything in character and adding inter-party banter (some people like acting as their character, others describe their character's actions/words), although one of the players is new and needs a bit more help.
