Always act out NPCs- This can be very difficult at times, I'm fortunate to be gifted in this area. Three good tricks- make a list of celebrities you can do impersonations of (I use one as a table) and use that. I've done a wizard Johnny Carson and a dwarf Jack Nicholson. Don't worry about matching gender or race, just go with it and it will happen. When it doubt, play against type. Play a butch elf, a effeminate dwarf, a stupid wizard, a scholarly fighter. This always works well.
Secondly, sure your NPC has an agenda, which may be completely unrelated to the the PCs. This gives your NPC instant depth, even if it's just getting drunk.
Thirdly, have them doing something at the time, reading a book, sorting something, this makes characterization easier. If it is a recurring character, make it something that will always be present (I once had a blind informant, and a mute thief, these are remembered years (even a decade!) later)
Other methods to get players into it:
A. Tell THEIR story, not yours. Base your story on their background and desires whenever possible. Once I had a player break into the house of his estranged sorcerer father, to find a golem of himself as a child and the animated corpse of his mother. They are still talking about that one.
B. Let talking work. To many DMs think that if they let players talk their way out of a situation they are letting the players get away with something. Don't, let them talk. If they are not successful at talking their way through things they will never attempt it and it just becomes an elaborate board game at that point.
C. Props, props, props. Use props whenever possible. Maps, notes, things you found in the attic or a garage sale/fleamarket/antique store. Once the players found a journal of a woman in a haunted town. When they found it, I actually handed them the journal. You'd thought I just handed them a bar of gold. If at all possible, a large map of their environment (town, country, whatever) should be on the table.
D. Keep them in mortal peril at all times. The players should never feel they can relax and be safe. This also means building in safeguards to keep them alive.
E. Music. appropriate background music creates a seperation between the game and the rest of reality. By the same token, playing in a space dedicated to gaming only helps, as it has no other associations.
F. Be perpared to improv. This may mean abandoning every plan you had to do what they want to do.
That's all I can think of for now.
