Rationale:

The object when choosing a password is to make it as difficult as
possible for a cracker to make educated guesses about what you've
chosen. This leaves him no alternative but a brute-force search, trying
every possible combination of letters, numbers, and punctuation. A
search of this sort, even conducted on a machine that could try one
million passwords per second (most machines can try less than one
hundred per second), would require, on the average, over one hundred
years to complete.

 What Not to Use:

• Don't use your login name in any form (as-is,
  reversed, capitalized, doubled, etc.).

• Don't use your first or last name in any form.

• Don't use use your spouse's, child's or pet's name.

• Don't use other information easily obtained about
  you. This includes license plate numbers, telephone
  numbers, social security numbers, the brand of your
  automobile, the name of the street you live on, etc.

• Don't use a password of all digits, or all the same
  letter. This significantly decreases the search time
  for a cracker.

• Don't use a word contained in (English or foreign language)
  dictionaries, spelling lists, or other lists of words.

• Don't use a password shorter than six characters.

What to Use:

• Do use a password with mixed-case alphabetic characters.

• Do use a password with nonalphabetic characters,
  e.g., digits or punctuation.

• Do use a password that is easy to remember, so you
  don't have to write it down.

• Do use a password that you can type quickly, without
  having to look at the keyboard. This makes it harder
  for someone to steal your password by watching over
  your shoulder.

Method to Choose Secure and Easy to Remember Passwords:

• Choose a phrase you will remember, and use the
  first letter of each word. For example, ``I used to like eating mud pies''
  becomes ``Iutlemp''.  Including capitals, numerals and punctuation makes this still harder to guess.

• Alternate between one consonant and one or two
  vowels, up to eight characters. This provides nonsense
  words that are usually pronounceable, and thus
  easily remembered. Examples include ``routiboo,''
  ``quadopop,'' and so on.

• Choose two short words and concatenate them together
  with a punctuation character between them. For example: ``dog;rain,'' ``book+mug,'' ``kid?goat.''

Lifted from:

Improving the Security of Your UNIX System

by David A. Curry

(with a few local modifications)