That Also Sounds Terrible. (Holy railroading, Batman!)

I didn't mean to represent the technique as 100% railroading; my example was rather an extreme case. Instead, we attempt to engage the characters in a plot on a personal basis. Saying, "ok, you are in front of the dungeon now" makes sense for a purely tactical dungeon crawl, but it's a terrible way to start a story.

Instead, we usually offer each character something that he really wants. Sure, sometimes this can be as simple as "the city is under attack, you've got to help or you might die"; and sometimes, the hook can be as simple as, "do this or rot in jail, you sociopathic smuggler", or "go into the dungeon and get rich". But every character has a backstory, and usually that comes into play as well, which makes for a more interesting plot. I do acknowledge that this style of play is not for everyone, and I'm not claiming that it's the best style in the world or anything of the sort.

Ok, so you're put into a situation where you have to fight whoever. Presumably, the goal of the party is now to fight and beat these people.

At that point, it's kind of too late to re-roll your suave diplomat into a grizzled killer.

By "goals" I don't mean that one guy wants to take over the world, one gal wants to save the princess and defeat the dragon, while the third person wants to go back to town and open a high-end boutique for the discerning adventurer.

Why not ? Taking over the world is a long-term goal. Players can work together until that is accomplished. The would-be tyrant would need a strong economic base, after all; so why shouldn't he get in on the ground floor of that nascent boutique business ? And meanwhile, political bribes and retail space rental prices don't pay themselves, so if there's work to be done, the tyrant and the merchant better go and do it... And of course, if the evil Necromancer destroys the kingdom, there would be nothing left to rule and no customers left to sell amulets to. That sounds like a sub-optimal outcome for all concerned...