All the ins and outs of choosing the perfect dog for you are all far too detailed for me to go into here, I would have to write a novel just to cover half of it! But as a simple guideline, look at what a breed was bred to do. Herding dogs were bred for intellegence, agility and the ability to run and run all day long, a herding dog kept in a dull yard or apartment all day will go crazy and you will soon find yourself without a backyard, sofa, table etc to come home to from a bored dog that just wants to run. Terriers were bred to hunt rats, if you're looking for a dog to laze around the house do not get a terrier! They are more than likely to excavate your yard without proper mental stimulation and exercise, thats what they are bred to do, consider training a terrier to dig in a specified sand pit just for them in your backyard, to save the rest of your garden. If you look at what a dog was origionally bred for, and match it to your own lifestyle, as well as cater for its needs eg obedience, long off lead running, and agility for working breeds, you are on the right track to choosing the right breed for you.
Also consider how much time you are willing to spend on exercise, grooming and training each week. Highly intellegent breeds such as Poodles and Herding breeds require much more training for mental stimulation than breeds such as the humble Basset Hound, however Basset Hounds require a lot more attention to grooming than many other breeds, due to their long ears and wrinkly skin. However, all dogs will need some basic training, puppy pre-school is a great way not only to learn the basics of training, but to socialise in the critical early stages of life too with out the risk of contracting diseases, though this will be covered more thoughouly later. Do you want a dog that will be good at agility and obedience? If this is the case, you should probably be looking towards breeds such as Papillons, German Shepherds and Labradors, as opposed to Basenjis or Mastiffs - both of which have the ability to learn, but may not be as willing to perform as many other breeds.
There are a few good breed selectors available to help you find the right breed for you, one common site is the PetNet Selectapet page, which has a few questions to help point you in the right direction, another good way to help find ideas about which breed will be right for you is to visit some dog forums and ask for oppinions there, you never know what people may come up with that may be perfect for you!
As a rule, stay away from any designer breeds, that is, breeds that are two different breeds combined together, given a fancy name and sold for more than the common mutt - which is what they are. Promises that you will get the best features from both breeds, because these promises are lies, and who wants to buy a dog from someone who is trying to lie to them? A cross bred dog is just as likely to get the worst features of both breeds as the best. I'm not saying that mutts are bad, just the people who intentionally breed two breeds together with their fingers crossed and sell them for hundreds of dollars, ensuring well meaning people that they will be something that they will not. If you are not looking for a pure bred dog, go to the pound and pick up a gorgeous puppy on deaths row, instead of buying from these charletons who are just looking to rip you off and make the most amount of money possible. There are a lot of these designer breeds in pounds looking for loving homes, after breeders promises did not come true and owners have had no choice to give up their dog due to allergys or inability to care for a dog that is too energetic or demanding for them, despite claims that it will have a docile personality because one half of its breeding does. If you are thinking of getting one of these dogs, my advice to you is seriously reconsider - if you still want one go to a breeder with a good heart, someone who does not breed these unpredictable mutts intentionally, but has just had one litter of pups from the family dog and wants to find good homes for the pups at a low price, anything over $100 is a rip off. Even if this is the case, I would want to see both parents, if you don't like the personality of both don't get the pup because chances are it could very well have the worse of the two personalities. Also keep in mind that many cross breeds grow to be larger than both their parents. Years ago before we knew better we bought a Poodle x Chihuahua from a pet shop (evil places, we will look at this in the "Choosing a Breeder" section), these days she would probably be dubbed a "Chipoo" (also avoid anyone who does this, if you want a cross breed look for someone who sells them as just that, they are less likely to be intentionally breeding, or trying to make money out of their mutts), she would come with promises of chihuahua size, intellegence of a poodle and non shedding of a poodle, instead, she has woolly fur that does need to be clipped, yet she still does shed, she seems to have the intellegence and personality of a chihuahua and is near on impossible to train, and she is even bigger than both a chihuahua and a mini poodle - proof that these claims are often untrue and you never do know what you are going to get. We still love her, but many people expecting all the good things from her may not, and she could well have ended up in the pound with any other person less devoted to dogs then our family is. Unless you are prepered for this do not even consider getting one of these cross bred dogs. The reason I devote such a long section to designer breeds is because I feel very strongly against it, there are enough dogs in the pound as it is, without unscroupulous breeders lying to sell their pups adding to the equation. So please, please don't encourage these breeders by buying puppys from them, instead go to the shelter and get a puppy, or adult dog which will give you just as much love, with the added satisfaction of knowing you've saved a life.