I find to get rid of the dry skin, exfoliating with my toothbrush once a week or so helps. Just wet your toothbrush and rub gently over your lips, then rinse the brush out really well.
And as far as lip balm goes, it doesn't get any better than Burt's Bees beeswax lip balm. I liked it before it was cool.
Seriously tho, that's what I use, and I've NEVER had chapped lips since. I currently have four tubes and am considering getting a fifth.
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Sage knows our mythic history, King Arthur's and Sir Caradoc's
She answers hard acrostics, has a pretty taste for paradox
She quotes in elegiacs all the crimes of Heliogabalus
In conics she can floor peculiarities parabolous
-C'hi