Learning to speak a language using Rosetta Stone is akin to learning to ride a bicycle by putting on roller skates. It can support the development of productive skills through the learning of vocabulary and structures and practising the ‘receptive’ skills (reading and listening). It would take an exceptional learner, in my opinion, to achieve more than elementary communicative competence in this way.
If you want to learn conversational German, you need to speak German. I’d also suggest that learning one skill in isolation is akin to learning to write without learning to read first – you can’t really avoid the other skills and genres of discourse.
Livemocha looks interesting, and I would certainly encourage you to join for the opportunities it provides you for practice in your target language. However, you will have to pay for anything but the basic German course.
I like the social aspects of the site – using peers who speak the language you wish to learn to help you and correct you, for example, is good practice that reflects current thinking on how people learn. On the other hand, you might prefer to study in a more interactive setting – with other German learners in a classroom. Ultimately, I’d suggest that conesequential contexts are where learning takes place, particularly at more than basic levels of proficiency. This means learning the language in groups.
Ideally, I’d suggest enrolling in an evening course at a local college or other establishment and using livemocha for extra practice. You would also do well to find a language exchange partner in your neighbourhood or school.
Where are you based, if I may ask?