both can work - it really depends on the developers
Mario & Luigi: Superstar Saga pulls it off perfectly: the characters are implied to quickly babble something in italian as a form of speech
and often do non-verbal communication (waving, making faces and such) - nintendo in general is very good at non-verbal characters
a game where talking really doesn't work is DNF 2011 - where the protagonist and the world seem to be two separate universes
and they don't react to each other at all (but then again this is the least of the problems with the game)
there are many games where it was solved by the companion doing the talking (Valve seems to love this approach )
one game I can think of where the protagonists talking really made the game better is Bangai-O (even with the plot getting thrown out the window halfway in the story)
later for the sequels they decided to concentrate on the gameplay only and abandoned any sort of main character or story - and it just felt pointless to play