Here are the rules, as followed by The Chicago Manual of Style (CMS) and most publishers:
Use the longer em dash to indicate faltering or interrupted speech. Here are some examples from CMS:
“Will he—can he—obtain the necessary signatures?” asked Mill.
“Well, I don’t know,” I began tentatively. “I thought I might—”
“Might what?” she demanded.
CMS also says that if the break belongs to the surrounding sentence rather than to the quoted material, the em dashes must appear outside the quotation marks, as such:
“Someday he’s going to hit one of those long shots, and”—his voice turned huffy—“I won’t be there to see it.”
The em dash, by the way, can be obtained in Word either when you write two dashes and immediately after write a letter, or by holding down the alt key and typing in 0151 on the keypad on the right.
The smaller hyphen is used when just a word is incomplete:
“I d–don’t kn–know what to th–think.”
You can use a combination of em dashes and hyphens in a sentence:
“Why—why don’t you dr–drive a bit more ca–carefully?”
The above sentence, to my taste, at least, has too many hyphens and em dashes. I would have pared some of these away, as they make it a bit more difficult for the reader.
As for ellipses, they really are meant to be used to indicate parts of a text that are missing. CMS gives these examples:
Everyone knows that the Declaration of Independence begins with the sentence “When, in the course of human events . . .” But how many people can recite more than the first few lines of the document?
Have you had a chance to look at the example beginning “The spirit of our American radicalism . . .”?
These days, though, many writers use an ellipsis to indicate speech that trails off, and most publishers allow that.
However, there’s a school of thought that would eliminate ellipsis, which have become rather overdone in writing today. For one thing, most writers use them incorrectly, when they should be using em dashes or commas. For another, if a writer uses them too much (as in every other sentence of dialogue) they become an annoying visual roadblock for readers. And, finally, they indicate weak dialogue.
“Ummm…what do you think…should I do it?”
“Hmmm…well…I don’t know.”
“Yeah…I better think about it…at least a bit more.”
Maybe real people talk like that, with pauses. But this is amazingly boring dialogue (not to mention that some of those ellipses should really be commas). If you are writing snappy, fresh dialogue, you probably won’t need ellipses.
So next time, before you type those three little dots, think about what you really need, and whether there’s a better way to write that piece of dialogue.