All you need to do is set the brush spacing to more than 100%. This produces a nice dotted line.
With the brush engine that appeard in v7, you can do dashed lines with a rectangulr brush, and the brush dynamics set to follow the direction of the stroke. I find the results sort of chunky-looking, though, and would prefer to use Illustrator for dashed lines, which can give you the cool styles quickly and easily.