Here are some interesting things authors have said about their characters and about creating characters.

Ernest Hemingway: "When writing a novel a writer should create living people; people not characters. A character is a caricature.."

William Faulkner: "It begins with a character, usually, and once he stands up on his feet and begins to move, all I can do is trot along behind him with a paper and pencil trying to keep up long enough to put down what he says and does."

Kurt Vonnegut: "Be a sadist. No matter how sweet and innocent your leading characters, make awful things happen to them -- in order that the reader may see what they are made of." - Bagombo Snuff Box

Jackie Collins: "I write about real people in disguise. If anything, my characters are toned down – the truth is much more bizarre." (source)

Dave Duncan: "If I wrote a character who really thought like, say a conquistador, the readers couldn't stomach him. We really use modern people in period costume." from (Wordbuilding from the Ground Up)

Stephen J. Cannell: "One of the biggest mistakes that most novice writers make is to create characters that all sound exactly like they do. This makes for flat-footed, uninteresting dialogue." (source)

Orscon Scott Card: "In truth, the secret to all characterization for me is expressible in two maxims: Every character is the hero of his own story, and You don't write characters, you write relationships." (source)

Stephen King: "I try to create sympathy for my characters, then turn the monsters loose."

Paulo Coehlo: "What I can say is that all my characters are searching for their souls, because they are my mirrors. I'm someone who is constantly trying to understand my place in the world, and literature is the best way that I found in order to see myself." (source)

Cassandra Claire: "Creating characters is like throwing together ingredients for a recipe. I take characteristics I like and dislike in real people I know, or know of, and use them to embellish and define characters." (source)

John Saul: "One of the reasons my younger characters are so convincing is because I have total recall of my own childhood. Many of my contemporaries can barely remember incidents from their youth, while I remember exact conversations." (source)

Janny Wurts: "I go into a scene, knowing where it starts, and aware of how its theme of conflict will resolve, and then just let the characters fly on their own merits." (source)

Mary Higgins Clark: "You have to know where the character went to school, whether she was a good student, what she loves, what she hates etc. You have to know everything about this person's character in order to write her properly." (source)

Alexander Chekhov: "In displaying the psychology of your characters, minute particulars are essential. God save us from vague generalizations! Be sure not to discuss your hero’s state of mind. Make it clear from his actions. Nor is it necessary to portray many main characters. Let two people be the center of gravity in your story: he and she." (source)

Ray Bradbury: "Find out what your hero or heroine wants, and when he or she wakes up in the morning, just follow him or her all day."