I want to allow the user to select one or many contacts from the contact entity, and then launch a dialog that accepts the record IDs. The idea is to add some custom configu
You'll need to specify the SelectedControlAllItemIds parameter in your Ribbon for that button. Here is a link that describes it:
http://social.microsoft.com/Forums/en/crm/thread/79f959ac-0846-472f-bff1-4f5afe692a56
--Edit--
I'm sorry, I misunderstood - you meant launch an actual CRM Dialog, not just a normal HTML pop-up dialog window.
CRM Dialogs can't be used on multiple records by design, so you aren't going to be able to use them for this.
However, you should be able to create an HTML web resource file that you can launch from the Ribbon, passing in the SelectedControlAllItemIds parameter. That HTML web resource would then have some javascript that would update the selected contacts using the REST endpoints (see the SDK for more information).
Hope that helps!