I just compiled it, nothing is wrong BUT ... Try this:
pawn Code:
public OnDialogResponse(playerid, dialogid, response, listitem, inputtext[])
{
    switch(dialogid) // Lookup the dialogid
    {
        case 1:
        {
            if(!response)
            {
                SendClientMessage(playerid, 0xFF0000FF, "You Canceled");
                return 1; // We processed it
            }
            switch(listitem) // This is far more efficient than using an if-elseif-else structure
            {
                case 0: // Listitems start with 0, not 1
                {
                    new neon = CreateObject(18647,0,0,0,0,0,0,100.0);
                    new neon1 = CreateObject(18647,0,0,0,0,0,0,100.0);
                    AttachObjectToVehicle(neon, GetPlayerVehicleID(playerid), -0.8, 0.0, -0.70, 0.0, 0.0, 0.0);
                    AttachObjectToVehicle(neon1, GetPlayerVehicleID(playerid), 0.8, 0.0, -0.70, 0.0, 0.0, 0.0);
                    SendClientMessage(playerid, COLOR_RED, "Red Neon Installed");
                    SendClientMessage(playerid, COLOR_SYSTEM, " 200$ Has been taken from you! ");
                    GivePlayerMoney(playerid, -200);
                }
                case 1:
                {
                    new neon = CreateObject(18648,0,0,0,0,0,0,100.0);
                    new neon1 = CreateObject(18648,0,0,0,0,0,0,100.0);
                    AttachObjectToVehicle(neon, GetPlayerVehicleID(playerid), -0.8, 0.0, -0.70, 0.0, 0.0, 0.0);
                    AttachObjectToVehicle(neon1, GetPlayerVehicleID(playerid), 0.8, 0.0, -0.70, 0.0, 0.0, 0.0);
                    SendClientMessage(playerid, COLOR_BLUE, "Blue Neon Installed");
                    SendClientMessage(playerid, COLOR_SYSTEM, " 200$ Has been taken from you! ");
                    GivePlayerMoney(playerid, -200);
                }
                case 2:
                {
                    new neon = CreateObject(18649,0,0,0,0,0,0,100.0);
                    new neon1 = CreateObject(18649,0,0,0,0,0,0,100.0);
                    AttachObjectToVehicle(neon, GetPlayerVehicleID(playerid), -0.8, 0.0, -0.70, 0.0, 0.0, 0.0);
                    AttachObjectToVehicle(neon1, GetPlayerVehicleID(playerid), 0.8, 0.0, -0.70, 0.0, 0.0, 0.0);
                    SendClientMessage(playerid, COLOR_GREEN, "Green Neon Installed");
                    SendClientMessage(playerid, COLOR_SYSTEM, " 200$ Has been taken from you! ");
                    GivePlayerMoney(playerid, -200);
                }
                case 3:
                {
                    new neon = CreateObject(18650,0,0,0,0,0,0,100.0);
                    new neon1 = CreateObject(18650,0,0,0,0,0,0,100.0);
                    AttachObjectToVehicle(neon, GetPlayerVehicleID(playerid), -0.8, 0.0, -0.70, 0.0, 0.0, 0.0);
                    AttachObjectToVehicle(neon1, GetPlayerVehicleID(playerid), 0.8, 0.0, -0.70, 0.0, 0.0, 0.0);
                    SendClientMessage(playerid, COLOR_YELLOW, "Yellow Neon Installed");
                    SendClientMessage(playerid, COLOR_SYSTEM, " 200$ Has been taken from you! ");
                    GivePlayerMoney(playerid, -200);
                }
                case 4:
                {
                    new neon = CreateObject(18651,0,0,0,0,0,0,100.0);
                    new neon1 = CreateObject(18651,0,0,0,0,0,0,100.0);
                    AttachObjectToVehicle(neon, GetPlayerVehicleID(playerid), -0.8, 0.0, -0.70, 0.0, 0.0, 0.0);
                    AttachObjectToVehicle(neon1, GetPlayerVehicleID(playerid), 0.8, 0.0, -0.70, 0.0, 0.0, 0.0);
                    SendClientMessage(playerid, COLOR_PINK, "Pink Neon Installed");
                    SendClientMessage(playerid, COLOR_SYSTEM, " 200$ Has been taken from you! ");
                    GivePlayerMoney(playerid, -200);
                }
                case 5:
                {
                    new neon = CreateObject(18652,0,0,0,0,0,0,100.0);
                    new neon1 = CreateObject(18652,0,0,0,0,0,0,100.0);
                    AttachObjectToVehicle(neon, GetPlayerVehicleID(playerid), -0.8, 0.0, -0.70, 0.0, 0.0, 0.0);
                    AttachObjectToVehicle(neon1, GetPlayerVehicleID(playerid), 0.8, 0.0, -0.70, 0.0, 0.0, 0.0);
                    SendClientMessage(playerid, COLOR_WHITE, "White Neon Installed");
                    SendClientMessage(playerid, COLOR_SYSTEM, " 200$ Has been taken from you! ");
                    GivePlayerMoney(playerid, -200);
                }
            }
        }
    }
    return 0; // If you put return 1 here the callback will not continue to be called in other scripts (filterscripts, etc.).
}
 
Are you sure you didn't do anything to it? Because it works fine to me ... 
Try to use another pawno ..