Dmg 2
Seriously... the DMG2 has some awesome tips on how to encourage roleplaying. Ive had this same question (just starting to level up from noob DM), and the DMG2 has pushed our roleplaying up to a level that I'm MUCH happier with.
1 thing we did (as was suggested in the book) was that every player (at the game table) had to tell
one positive tie-in with another player (ie. we went to school together and hung out a bit, blah blah blah). Each player has to be picked. Then they had to
tell a bit of a problem that one player has with another (i.e. Thom has never really trusted Morgan's motives, because he once saw her, blah blah blah). It was all made up on the fly at the table.
Another thing i did was had everyone tell 3 NPCs that have had a strong influence on their character. I than spent some time (before our next session) creating back-stories for each player to rolepay. For instance, our elf who had left home to journey - When she went for a walk, i told her "as you are walking, your mind wonders and you remember the day you left home". I then had them roleplay the conversation she had with her parents before leaving. I chose other players to roleplay the mom & dad, and one even played her little sister (it was all on the fly). Very cool, and added a backstory.
Another thing that i've been experimenting with and works well is
letting the characters describe the scene. So for example, the player asks me "whats the guys name", and then ill say something like, "the names on the tip of my tongue" and then look at another player.. "what was his name again?"

Then they come up with it on the spot. This can also be used to describe a locale.
Also, finding some transcripts of people roleplaying (there are examples in the DMG and DMG2) and then reading it to the players, helps them to see what they can do.
Lastly, something i'm thinking of trying at our next session (as a visual examaple of what exactly roleplaying is), is taking a sheet of paper and writing a sentence... then pass the paper around and have everyone add something to the story. Then saying, "this is basically what we're doing in the game".