How does Shakespeare use language and dramatic effect in the opening scene of Othello?Focus particularly on Iago.

The play begins with Iago and Roderick's conversation in Venice.  Roderick listens intently as Iago rambles on about how he was overlooked for the position that Cassio has taken.  Because of this slight on Othello's part, Iago vows to bring him down. In line 68 the villain honestly states,

"I am not what I am" (1.1.68).

With such a straightforward comment, Iago sets the stage for one of the play's major themes--appearance versus reality.  In short, he is able to manipulate most of the play's characters because of his chameleon-like qualities--he can become whoever someone needs him to be.

A good example of this is Iago's switch in language depending on whom he is portraying and talking to.  When he and Roderick awaken Desdemona's father Brabantio from a deep sleep, Iago no longer speaks in verse (the language of the civilized); rather, he switches to prose to demonstrate that he is a common street ruffian bringing bad news to Brabantio.  In his speech to Brabantio, he also introduces two of the play's motifs: animal imagery and light/dark contrast.  He tells Desdemona's dad that

"Your heart is burst, you have lost half your soul;
Even now, now, very now, an old black ram
Is tupping your white ewe" (1.1.93-95).

Iago's language is certainly graphic, but he knowingly compares Othello to an animal to stress not only his race but also to manipulate others to see the military general as no better than an animal.  He later compares Othello to a horse and subtly persuades others to treat and talk about Othello in the same manner.

In regards to the dramatic effect, Shakespeare sets the first scene at night (another part of the light/dark contrast) because something "uncivilized" occurs.  Every night scene in the play features something tragic or untoward happening.  With the dawn of the day, the truth is revealed, but in the end, it is too late.