Design is the probably largest factor in book buying besides name recognition. I know myself that I've bought books solely on the great cover design. Whether your book will actually be in bookstores doesn't matter, a great cover design is goes a long way. Besides you want the cover to be as good as the writing inside so this part of the site is very important.
One thing I suggest is that you have, is a pretty decent handle on Adobe Photoshop or the open source GIMP. It's going to be pretty hard to pull it off if you don't. Odds are, though, that you know someone who does know it pretty well, so you will want to ask them to help. Another thing I'm going to warn against is the Photoshop filters and effects. Don't use them. Why? Because if you don't know how to use them properly they will look really cheesy. If you are determined to use them, use them very lightly and sparingly.
Design is a huge subject and any graphic designer who reads this site will probably get mad at me for even attempting to teach you some of it , without teaching all of it. If you end up being interested in design I recommend you sign up for some real education if the field. Don't end your studies here, because all I'm giving you is some tips on how to make your cover look better.
There are only two things that I'm going to advise you to do with your cover design, and they seem like very two very simple things, but they can be hard to pull off.
Another good idea is to look at covers of book's that you already like and see what you like about them. Look at how the image is placed, how the title is arranged and placed. Examine many different ones, even covers that you don't like, and try to figure out what you don't like about them. Take the idea's you like and write them down. Write down the one's you don't like too, and try to avoid them. Sketch out some more idea's after you do this.
Plan on designing for at least 2 months. Trust me you will want to have lots of time to make changes, so start the cover early, sometime during the copyediting of the manuscript.
I can't tell you what a good image is, that's something that you, and the author will have to determine. It could be a line drawing or a photograph, but either way you need a good reproduction of it. Depending on how you are printing the cover you will need at least a 150-300 dpi scan (in .tiff file format). So an image off the internet (which are 72 dpi) is not suitable. These scans will be big files, and you will need a computer with enough RAM to handle it. A good image doesn't have to take up the whole of the cover, it can make use of what is called white space. White space is using the empty area around the image to draw the eye to it. White space doesn't have to be white, it can be any colour (it's just called that, because, well I don't know why). Play around with the placement of an image. Don't be afraid to use another image if the one you picked just isn't working. Try to plan what you will do with the back cover when you are looking for images to use on the back as well, if the artist has two similar images and you can't choose between them, use one on the cover and one on the back cover.
You have to keep in mind the method that you will be using to print the cover when designing. If you are using a black and white photocopier, don't use a color photo, try using line art. Same goes with silkscreen and other hand printing options. If you are planning on getting the cover printed from file at a print shop, make sure to phone the printer before and get the proper file submitting specifications. Many small print shops will accept photoshop files, but make sure of that before hand. You will also want to 'flatten the image' before sending it to them. Ask them to print only one out before proceeding with the whole job (if you're getting them printed on a digital press that is), this is to make sure you didn't screw something up. If you made the file 72 dpi by accident you will be kicking yourself when you're stuck with a whole wack of crappy covers.
Remember, pick an image that is appropriate for the content. There are a lot of cool looking images out there, but if it doesn't fit with your story it's no good. So make sure to pick it carefully!
How you arrange the title and author name are just as important as the image! You may not think so, but you can almost skip the image with amazing typography. So spend some time with this.
The best way to get effective use of typography with the cover is by using contrast. This means using two typefaces that contrast each other, for example, using a bold sans serif with a regular serif. In the image above the title on the right uses a script typeface to contrasted against the serif. Color, adds another element of contrast. Choosing typefaces is a very important part of this procedure. Typefaces that are too similar will conflict, this is something to avoid because it doesn't add anything to the design.
Play around with the arrangement of the words. In the example on the right Shadows overlaps some of the other words, while the others fit into a strong box formation. See how the words fit together, try and find a way to bring the words together, or keep them apart. Fool around on paper first, then go on the computer and try different sizes, weights (light, regular, bold or italic), and typefaces.