I've just started the query process (only seven sent so far), and of the two query letters I've composed, one incorporates dialogue from the novel to highlight plot point's. Is this okay to do, or frowned upon?
It's not so much whether it's ok or frowned upon, as whether it's effective.
And generally it's not.
Your query should focus on the precipitating incident of the plot: what changes for the main character? What's at stake with that change?
Lines of dialogue that are explanation of plot points sounds like bad dialogue. There's a now classic blog post on Turkey City Lexicon that names this kind of dialogue "As you know Bob." It's bad in a book, it's death in a query.
For help on figuring out how to get plot on the page, consult the QueryShark blog.