When creating a character, a common fault is to create the Cool Look you think the character should have. You like those tight, holey jeans, so give him some tight, holey jeans. You like orange, so give him an orange shirt. You like Pokémon, so give him a Pokémon-flavored shirt. An orange, Pokémon-flavored shirt. When designing the appearance of a character or a room, you have to aware of what your appearance is saying about your character, because whether you (or they) realize it or not, people are going to analyze the crap out of your character's appearance.
Consider those jeans: they're common now among the goth/emo crowd. Does your character identify with that particular group? Consider the shirt: is your character a gamer or a card-collector, or is the shirt a hand-me-down from a sibling who was one of those?
One of the best examples of characterization by appearance I've seen is from Eudora Welty's "A Worn Path."
It was December—a bright frozen day in the early morning. Far out in the country there was an old Negro woman with her head tied in a red rag, coming along a path through the pinewoods. Her name was Phoenix Jackson. She was very old and small and she walked slowly in the dark pine shadows, moving a little from side to side in her steps, with the balanced heaviness and lightness of a pendulum in a grandfather clock. She carried a thin, small cane made from an umbrella, and with this she kept tapping the frozen earth in front of her. This made a grave and persistent noise in the still air that seemed meditative, like the chirping of a solitary little bird.
She wore a dark striped dress reaching down to her shoe tops, and an equally long apron of bleached sugar sacks, with a full pocket: all neat and tidy, but every time she took a step she might have fallen over her shoelaces, which dragged from her unlaced shoes. She looked straight ahead. Her eyes were blue with age. Her skin had a pattern all its own of numberless branching wrinkles and as though a whole little tree stood in the middle of her forehead, but a golden color ran underneath, and the two knobs of her cheeks were illumined by a yellow burning under the dark. Under the red rag her hair came down on her neck in the frailest of ringlets, still black, and with an odor like copper.
There are some great details in here that you'll process without even realizing you're doing so. For example, consider her umbrella cane and sack dress. Is she poor and unable to afford a real cane or dress? She must also be resourceful to think of using those common items as utilities. There's also the rag in her hair (implying that she's too poor to have her hair done), the blue eyes (cataracts), the tree in her forehead (symbol of strength), and the golden color ("Phoenix" Jackson).
Writing like Welty is something that I believe is neither desirable nor necessary (not that she's a bad writer), especially in fan fiction, but this short passage has lessons from which almost anyone could benefit. To drastically improve your description, just remember this: when working with appearance, do not put in what you think is Cool; put in what will help to create the character the story needs.
(That's something I always come back to, it seems; the story always is and always will be more important than anything from the author's preference.)
* Also see my description mini-tutorial on Apocrypha, which has a short section on this.
