Inform yourself about the person you are recommending. Spend some time talking to them about their goals and the position they are applying for. Gather together their current resume, any memos or notes you may have on them, and any other information that will help you as you write the letter. The best recommendations are thorough and specific, and having all the information at hand will make the process much easier.
Don’t exaggerate -- show where and how they can improve. Don’t put the candidate on a pedestal. Not only does it not look plausible, it will also set expectations for them that will be next to impossible to meet. If they have an Achille’s heel, don’t exaggerate it, but don’t hide it, either.