Dexterity measures agility, reflexes, and balance. This ability is most important for rogues, but also for characters who typically wear light or medium armor (barbarians and rangers) or none at all (monks, wizards, and sorcerers), or for any character who wants to be a skilled archer.
The importance of dexterity depends on the type of character being played, with a good number of characters being dexterity-based (striving for as high a dexterity as feasible, once the other abilities are at acceptable levels). Characters that are not dexterity-based tend to have a goal modified dexterity based on the maximum dexterity bonus of the type of armor they plan to wear. This goal is typically 12, given the +1 maximum dexterity bonus of full plate. Some players like to have their base dexterity score equal to their goal, while others go with a lower base dexterity, assuming they will be able to find sufficient ways to augment the ability. (Exceptions to these generalizations do, of course, exist in a game as flexible as Neverwinter Nights.)
The addition of the dexterity modifier to armor class is subject to the maximum dexterity bonus of the character's worn armor, which can result in a lesser amount being added. Furthermore, no addition is made when the character is flat-footed, unless the character has uncanny dodge or defensive awareness.
Attacks made with a ranged weapon normally add the dexterity modifier to the attack roll, but zen archery allows the wisdom modifier to be used instead. Similarly, attacks made with a melee weapon normally do not use the dexterity modifier, but for certain melee weapons, weapon finesse allows the dexterity modifier to be used instead of the normally-used modifier (strength).