One of the greatest and most basic rules of thumb in the world of writing is: “Write a story you would want to read.”
The next question is, “What kinds of stories do you enjoy reading?”
Once you’ve answered these two questions, your journey into the realm of writing has begun. And yet, so many writers seem to forget these basic questions. Too many get caught up what they think other people want them to write, or what other people want to read, or what kind of story formula will guarantee sales that will make them a multi-million-dollar success. If you start coming at stories from that angle these days, you are only sabotaging your own efforts. Your readers can tell when a story has heart and when it was written with calculation designed to draw them in. To an extent, every writer is trying to pull readers in, but the difference is this: are you trying to hook them because you think you have a good story to tell? Or are you trying to hook them for the money and popularity?
With that moral dilemma out of the way, you can concentrate on what kind of stories you like. This includes genre. Do you read a lot of romance? Horror? Science fiction? Historical fiction? Fantasy? What kinds of passions or information do you horde? What fascinates you, intrigues you, repels you? And within those genres, what kinds of stories and characters pull you in? High adventure? Introspection and philosophical questions? Tender relationships? Stories where lots of characters live or one where lots of characters die? Do you like short, self-contained tales or a sprawling Deep Space 9 opus? What style of language draws you in? Clear, simple, and concise or something more “literary,” poetical and complex?
In my case, I like longer, character-dependent fantasy works with high, traditional adventure and danger with a dash of romance and clear but semi-poetical language where the majority of the characters have a happy ending. Those are the kinds of stories I read, so those are the kinds of stories I want to write.
Another rule of thumb in the writing world is: “To write, one must read.” Once you’ve established what genre you like to read and what kinds of stories and characters you like to read about, you need to consume as many books like that as you possibly can. You need to learn what has been done, what hasn’t been done, what has devolved into cliché and what can be tweaked to become fresh and new. You need to learn the conventions of the genre, what rules you can and cannot break. You need to see how the writers of those stories drew you in, made you have an emotional stake in the characters and the outcome of the story. And, once you’ve read as much as you can about what you like to read and want to write about, you need to read things that you ordinarily wouldn’t read. Even if you don’t want to write an Asimov-like story, if you’re writing science fiction, you need to be exposed to the greats like Isaac Asimov, Ray Bradbury, Ben Bova, and Orson Scott Card. You need to read outside your genre as well to see if there are tricks or information found in other stories that can help make your own better. And don’t underestimate the power of nonfiction.
I draw on Mercedes Lackey for interesting, compelling characters, Barbara Hambly for word choice and description, C.S. Friedman for magic and moral dilemmas, R.A. Salvatore for fight sequences, Elizabeth Haydon for rich, interweaving plotlines, Simon R. Green for down-and-dirty backstabbing, Niccolo Machiavelli for political structures, J.R.R. Tolkien for lovingly detailed world creation, and anime for complexity and melodrama. I am influenced by each of these writers and their works, along with many others. But I do not copy. I hope that while people can trace the influences that they have had on me, I pray that my work will never be considered “a Harry Potter knock-off” or “Tolkien wanna-be” or “a pale imitation” of any other fantasy.
Everything you read influences you and informs you, so read as much as you can and as widely as you can. This doesn’t mean that you have to like everything you read, but you need to at least be exposed to it. The more influences and information you have for your imagination to draw on, the better off you’ll be. Now does the adage “Write what you know” make more sense?
The Cat's Cradle : On Hiatus! 
I'm a big fan of this one, myself. I'll read any and every genre, though there are of course those I prefer over others. Nonfiction cannot be overstated, though, because the more you learn about the world around you and how it works (no matter *what* the subject- history; psychology; wildlife), the more builidng blocks you have to play with. I try to alternate the books I read, so every other book is nonfiction. You would be surprised how much of this stuff naturally pops up in my fiction writing.
Yes, I'm learning that myself, although I came into reading nonfiction fairly late. Everything you read can be an influence and is full of useful information. That's why most great writers are/were also avid readers. ^_^