I just let the conversation flow freely and see where it ends up. My free talk lessons have been very beneficial.
I am learning Arabic. I have the basics and I focused for a while with conversation. With one teacher that I know well, we usually start with some small talk, the weather, family. What we did since the last encounter. Then we switch over to a more elaborate topic, books, films, news to discuss. Sometimes my teacher sends me a poem or a small video on YouTube. Or I send her an article (in English or Arabic) I would like to discuss. Most of the time the conversation just goes on and I am surprised about what we talked about!
We work on Skype. She is very smiling and friendly and has an excellent internet connection. She writes down what I say, entire phrases or new vocabulary. That is absolutely essential for me. After the lesson I study this vocabulary and copy it in a notebook by hand. She is very talented on keeping the conversation go on. When I say something she always has an open question to make me speak further.
I considered once recording the conversation but then I wasn’t able to find a way. Of course we discussed it.
My favorite experience is with my current teacher!
Between our lessons, I write short diary entries about things that interest me (summaries of shows I've seen or just a paragraph about my cute nieces, whatever I feel like) and then we read them in class and talk about them. There's always much more to say about the topics I write about so we never run out of things to say! And since I choose the topics, I'm 1. kind of confident in the vocabulary so I can keep up the conversation and 2. interested in what we're talking about so it's always fun.
I've sat through lessons with other teachers where we spent an hour holding awkward small talk or talking about things that I had absolutely no interest in before and I wouldn't want to go back to it, ever. :P
Thanks for elaborating your experiences guys!