Sure, too much free conversation too soon is to be frowned on (usually it indicates that the teacher has probably done little or no serious planning or preparation), but unless a student has already reached a certain level and has very specific demands otherwise (i.e. Super ESP+), I can't imagine they wouldn't have becoming conversant in (and not just with) English generally as one of their goals (main ~ ?). So the challenge would often still seem to be to find a way of at some point translating all the stuff in coursebooks, grammar manuals, dictionaries etc into convincing interpersonal/"conversational" shape (I use the scare quotes because there is nothing wrong in explaining goals before demonstrating how a conversation might go, then calling time out, performing things again etc), and I think if you don't do this, then probably the student's listening and general ease with and "understanding" of the language (i.e. the interpersonal functions and aspects of it) might not develop enough. Of course, getting students to
talk convincingly and well before they are ready (or at least have seen you perform first) is the real challenge, but this too is something they will have to do at some point (in order to to convert input into actual skills that they trust/see
you trust in - students shouldn't be allowed to just absorb without ever really proving themselves).
I've made quite a few posts on discourse, conversation etc in developing I guess more "human" approaches - some suggestions for search terms here:
http://forums.eslcafe.com/teacher/viewt ... 0186#40186
You might also like to look at books on 1-2-1 teaching by the likes of Peter Wilberg (and other LTP books), or Tim Murphey, but I'm not sure that these actually tell you much that you won't realize from actual linguistic research (vocab, lexical approaches, phraseology, corpus linguistics, DA and CA etc all seem fruitful, practical areas that will provide plenty of ideas and activity seeds - there's a methodology of sorts in the language itself!) and pondering planning by yourself.
One thing that could well be worth looking at is how to organize notes, notebooks etc. The following is a thread with some leads on that, and "learner strategies" generally:
http://forums.eslcafe.com/teacher/viewt ... 4933#24933
Sorry if this seems just so much handwaving ultimately, but I believe I've had a few reasonable small-class or 1-2-1 lessons from not pushing the formal teaching too hard (even though I do know a fair bit about grammar etc) and trying to make some items or aspects of the language come more alive for the students I've taught. So my advice would be to become as knowledgeable as possible, if only because that will then give you the ability confidence to actually say "more with less". Certainly, I would strongly recommend against using too general a methodology, because to be honest, a lot of what passes for "communicative" etc is anything but and actually quite inimical to developing understanding in teachers and thus students. (Hope I'm not reading too much into your post!).