Does one need to know programming and video game development to get a job in writing the storylines and dialogue in campaigns and RPGs?

Game programming is a skill, and it's not one that is required for a position as a narrative designer. Game development is a process and it's important for you to understand your  piece in that process as well as what others do, and how to perform well within that process. Basic scripting skills are essential however as there are often event and animation triggers and camera directions that are associated with the dialog and they must be much more specific than the stage directions you would author for a play. Many of the best engines have visual node based dialog tools and it pays to be comfortable with them as well as text based. There aren't many full time jobs for "just writing dialog" in the games industry, most of that is contract work. The ones that do exist are hotly contested. What does it take to get into those positions? A masters degree in English with a thesis on interactive storytelling and a strong portfolio of interactive stories that showcase your work. Or a Bachelors degree in game design with a personal emphasis on interactive storytelling, plus years of working your way to the position. Or career experience as a professional writer and at least one project that demonstrated you understand interactive dialog. This is going to get you only contract work unless you learn how to use game dialog design tools.

I will caveat my answer with the following opening which may disregard the rest of my content: I do not work for a game company; I have never worked for a game company.... However, since my job "borrows" a lot from the gaming industry, I have been known to appear at the Game Developer's Convention, SIGGRAPH and several other conventions. So I do spend time with a few of these people on the professional level. Thus here is my take. There are three very important jobs in the video game industry. 3D artist (modeler, chief of mayhem, etc) who makes things "look good." The programmer who makes things "work good." And the writer who makes things "entertaining and enthralling." These three can be three different people, they are usually teams in the big software companies. But think about it for a moment. If the writer has no concepts about the limitations of software design he can write an incredible story line with such advanced physics capabilities and requirements that the programmer can't make it. The modeller can do the same offering extremely realistic art for the game that is impossible to implement. Assuming this team works well together and always communicates well with each other, no problem. Reality? Communication hinges on understanding. Understanding implies "some" overlap of knowledge. A really good team specializes in their sections, but knows enough about one or more of the rest of the team to communicate well AND to do their jobs such that it does not over-burden one of the other two jobs. You can do your job without overlapping skills, assuming really good communication and team skills, but overlapping of knowledge gives you an edge on a resume/application. This is basically what was said at one of the creativity workshops I attended at a GDC a number of years back.

If all you're focused on is dialogue then knowing a bit about video game development is fine. You shouldn't need t know how to program. If you're working for a small shop on the other hand, then you might be programming, writing and drawing at the same time. In a larger shop, the writer might be a different person. Overall writing for video games is different from writing for movies or TV shows. A movie/TV show is a linear event, there is a start, middle and an end. A video game is not linear, especially an RPG. Often you have to go somewhere do something, interact with some people and then go some where else. If you do not perform the action correctly or in sequence then the dialogue has to reflect that. If a movie is 2 hours and a video game has "8 hours" of play, then its not like the video has a script that's 4X as long. Often it can be much more because you have to write for not just the one linear path but the other paths as well. If you want to write for video games, then its best to know some basic programming. Chances are that your first job will be with a small shop and they'll need help for everything. You'll also need samples which will mean doing some type of development. The easiest thing to do is to study video game design (or a similiar major) along with a concentration in English and make some games with friends. They do not need to be very good but good enough to showcase your skills.