Rich Burlew, of Order of the Stick fame, sometimes writes material to be used in D&D campaigns. He wrote a series about creating a campaign world. I've looked at his conclusions repeatedly, as well as his process, and I have to respectfully disagree with a large portion of it. He did end up hopping out of D&D for his setting, which actually improved both his setting and the fit of his entire process, but I still feel like some of his decisions are odd. Well, it's time to stop sitting here criticising and get down to business.
First, as Mr. Burlew astutely pointed out, you should state your objective. I disagree though, on which goal to state. A setting for your gaming group is usually best done very thoroughly, too. They'll appreciate it.
The goal here is the general type of campaign world. Since I mostly have players interested in D&D right now, I think I'll go with a D&D setting. But what kind? I don't want an Eastern setting, which is a lot of work for D&D, anyway. I'll be doing a Western setting, though it'll look a bit different from the reality of Western Civilization. Basically, I'm looking at starting from a fairly generic fantasy setting.
Next up is the static vs. dynamic problem. I love working with a dynamic world, but it takes some extra work to make sure that it can change over time without becoming a completely different setting. Forgotten Realms, for example, has an ever-deepening history, which is interesting, but it can be frustrating when players look up things about gods who died in the Time of Troubles (well, actually, that was even written into 2E stuff, so there's little chance of that with 3.5 players, but you get the point). At the same time, stagnation is frustrating. If there isn't room for one kingdom to take land from another, a king to be deposed, or a new god to rise up, the players may bore quickly. If you create a dynamic world, it also means that you may have to make up new maps every once in awhile. I'm willing to do that, and it is always fun to retire characters by giving them kingdoms or even godhood.
Looks like I'll be creating a dynamic standard fantasy setting.