The first thing I do is set my character in motion. She has to do something. When I know how she'll complete her task it tells me an awful lot about how she looks and acts. Next comes my goal for her, what is the purpose of this character. Now that I know how she acts and what's she's going to do I'll start to fill in the blanks. This is when I define the rest of the details on how she looks, who she knows, why she acts as she does. Then I define her relation to all the characters I had created earlier. At this point she fits into the story quite well so then I have to think of a name for her, god do I hate naming characters. I have these simple little schemes for most of the names I come up with, four of my characters are named after beers, all of my nobles are named after scientists, all of my mercenaries are named after people I know and the street they live(d) on.