When was the last time you had small talk going on around your table? Now, I don't mean little bits and pieces of it as part of polite conversation. Anyone who has run a political game has probably seen lots of that small talk. "Oh yes, we're here for business...but before that, lets have a few hours of discussing the weather. Good good, yes yes." and then, the real business can be gotten to.
Often times, that doesn't even happen. The bits of pleasantries are skipped over or brushed aside. Rightfully so too, they're not important and the PCs are there for a reason right? So why not get to it. It is almost like a RPG version of the rule for writing stories, no scene goes in that isn't important in some way. The only problem is, small talk can be important to a game, or at least the characters in it. The little bits of conversation, natural and light, that people share in quiet moments can be very telling for how people interact.
At the tables I've been part of lately, there is often a mix of IC/OOC banter - usually more IC than OOC too - that helps keep people going in the game. Characters not in the spotlight, or even during it, will often have little quips. Sometimes these are from the players, sometimes from the characters, but it all contributes to the overall feel of comraderie. It can be a powerful thing, and a great group building tool when it gets done right.
So, do you have it in your game? Do you encourage small talk? How does it work for you? Or is it just some unimportant bit that can be nice to have, but ultimately just a very small and expensive luxury item?