How does a teacher use observation during an actual lesson?

When a teacher is in the middle of a lesson, real time, what can observations of student responses, activities and interactions provide? Is there a difference between formal and informal observational data? If so, how can the teacher use both to guide both general instruction and specific student instructional needs?

This forum discussion is primarily driven from the Oral Language Development site and examples. If you would like to review actual video clip examples of teacher practice based on sound use of participation structures for enhancing oral language, please explore the OLD site, returning here to share your insights.

* Participation structures include: Brainstorm, Elaboration, Paraphrase, Turn and Talk, Write-Pair-Share