Two things characterize a good password: 1. it's easy to for you to remember and 2. it's hard for others to guess.
Web expert Eric Meyer's got a great method to pick a good password: choose two words you'll remember, and interleave the letters. So if you chose life and hacker, your password would be lhiafceker. Looks like gibberish, right? But it's easy to remember (and even type after some practice.)
If you don't want to use one password for every place that requires one, a variation on Eric's method is to combine the service name with a word you choose. So if blue's your word, your Ebay password would be ebblauye and your Paypal password would be pbalyupeal.
Password Production [meyerweb]