It is no easy task creating characters that readers and even I, the writer, can sympathize with. To me, its like walking a tight rope. Make characters too nice, and the reader finds them sappy and unrealistic. Make them too angry or evil and the reader gets sick of them and roots for them to be taken down a peg.
The key, for me, has always been to assign my characters a real back story, even if the reader never has access to all of it. In doing so, I give my characters real motivation. This way, the reader can at least meet the character half way. A perfect example of this happened recently when I was reading one of the newer as yet unpublished chapters of H&T. I was reading aloud to my "ear editor" (the person that I read new chapters to for helpful commentary before I edit) and he was more than a little annoyed with Honor. He said that she has mental problems and that she is not too smart. Of course, she is my girl, my creation, and so I had to disagree. I explained that indeed she is very bright, but that her past of poverty, of having to struggle and fight for everything, made her incredibly intolerant of certain social trespasses. Additionally, she is aware of this weakness of hers, anger, and hopes to one day learn to control it. (Hope I didn't spoil anything here.)
Character creation, I think, also depends on if the story is character driven, as opposed to story driven. If character driven, you have got to absolutely know this character so that their actions and behaviors make sense and are believable. If the story is driven by events, I think that this might, perhaps, give us more leeway as to how we make the characters react to what is happening to them.
In the past, I've found the book Building Believable Characters by Marc McCutcheon very helpful in terms of getting the skeleton of my characters started.
Share any techniques that you may have that help you to create characters that you can live with.