What follows is my personal advice on how to find the right skin for you, based on my experience, lots of mistakes, and advice from friends. I'll also show some of my skins and give you my quick impressions. My hope is that this will help you avoid some of the mistakes I made, and save you some Linden as well!
Before I go any further, I want to say that how you choose to look is your business. There are a lot of strong opinions out there as to what makes a good skin. What looks good to someone else may not look good to you. Put some thought into the look you're trying to achieve as well as how you plan to spend your time in Second Life. If you're heavy into Gothic and role play, you may have very different skin needs than someone looking to be a dancer or escort.
Now that we've determined how we want to look, let's get started.
My first suggestion is to do a little research (not much - just enough to get you pointed in the right direction). Start by asking your friends about their skins (assuming you like their looks). Have them show you their older skins, including skins they don't like. See if they will model their skins using your shape.
Other good resources to check include many of the Second Life fashion sites and blogs (I'll try to add links later). You can also ask people you meet in Second Life about their skin (be polite and most will give you an answer). The point here is to try and identify a number of possible skins while hopefully eliminating a few as well.
Armed with your list of possibilities in-hand, go hit the stores for demos. Don't buy anything yet, don't even try the skin on in the store. Just find the demos you want and take them with you. Make sure to get a couple of different skin tones and makeups if possible.
This will be very time consuming and you may just want to just get it over and buy something, but trust me on this one, spending the time now will save you Lindens in the long run.
Go find somewhere nice and quiet. Try on each skin and look closely at the details. See if there are any strange colorings, shading issues, or seams showing. Change the lighting and check again. Try on different outfits and hair. If the skin is modifiable, try adjusting the color and tone. Look and see if the skin and shape work well together. If not, don't give up yet. Try making adjustments to your shape. The lips usually need adjustments to match up well with new skins.
Now comes the hard part, making a final decision. This one is your call. Just remember it is your Second Life, pick something that makes you happy.
What are you waiting for, go get that skin and have fun!
To view my skins, follow the link to Flickr.
Flickr Skin Photo Set
About my personal skins:
I currently wear skins from Second Skin Labs for most occasions. I also wear Gala and X2, along with a very cute skin from Nylon Outfitters when I'm in a playful mood.
Second Skin Labs
I haven't worn any of the skins from some of the more well know skin makers such as Celestial, Naughty, Tete a Pied or Adam 'N Eve. One day I'll get around to at least trying demos of them to compare.
I have had a friend model her Celestial Vouge and Naughty Haley skins on my shape. I couldn't stand the Celestial (the lips looked so wrong on me), though the Naughty wasn't bad.