It sounds like a lot of you guys have experience going to the SPCA or local shelters and finding a GOOD dog!
What are some the qualities/characteristics you looked for?
Well, first of all, some shelters have "sponsored pets" so adoption fees are greatly reduced. What that means is that some pet-lovers have donated as much as $100 to reduce the adoption fee. (People like me- I donate for cages, pet adoption fees, etc, so that people with little money can get a great dog, and neutered! for $25 or so).
Secondly, look for a "breed". I don't mean a purebred dog (although ours is). But, "breed characteristics". Labs are known to be loving and gentle, with males being closer to people. Male labs want to be NEXT to you at all times. Females will still stay close but in the next room. Huskys are aloof, and need to run, etc. Poodles are intelligent, but need a strong leader, etc.
One of my pet peeves came out again today, when I looked at Petfinder.com to get the link. People got dogs for their status, and then discarded them for being their breeds! Examples: collie (sheds too much); dalmation (hyper); walker treehound (barks and chases things); pit bull (can't get along with other male dogs), etc. WTF!?! It's not the dogs' fault they are their breed! Keep in mind that some characteristics are exaggerated- but still, usually an issue in the long run. Pit bulls can be wonderful family dogs, for example. But you can't get a home day care license in Michigan if you own one.
What do you want? High energy, quiet, docile, etc, are all "breed characteristics" although there are always exceptions. I know you mentioned size. If that's important, then look for that. My opinion (and take it for what it's worth- dog owner for 25+ years) is that smaller dogs have more risks. Because of their smaller size, they seem to need to be more "dominant" in a home. I would rather walk up to a pit bull than a chihauhua. I know that's an extreme example, but my experience with hunting dogs and pets is that the smaller dogs can be more hyper. Not always, of course- but be aware of their characteristics.
Mixed breed dogs are great! A couple of things to look out for: aloofness. That sounds weird, but sometimes dogs are not "people dogs" and they'll be friendly, but kind of aloof. They never really "bond" to their owners. I've seen this in huskies- tolerate their owners, but not really a pet to cuddle and be a companion. And boy, do they want to RUN! Some dogs are destructive when alone- ask about that! You don't want to get attached to a dog to find that he has separation anxiety and trashes your house when you're gone. If a shelter dog jumps or pulls on the leash, those issues are irritating, but easily fixable with some training, so don't be dissuaded.
A dog that meets you, and focuses on you is a great start. They'll look at you like "what? what are we doing now?" A dog that seems to be distracted may be just be glad to get out of the kennel, though, so give him a chance!
Older dogs tend to be more "what you see is what you get". You can still train them; Toby is a great example- he didn't know any commands when we got him and now he knows more than 20!- but you'll know their size, temperament, chewing habits, separation issues, etc.
It's hard, but try not to fall in love with a dog at first sight! Like buying a car, you need to consider your ability to handle that car (dog). If you're new to dogs, you don't need a high maintanence dog like Bedlam has. You need a more easy going dog. If you're not real great at discipline, you don't want a poodle, because a dog like that will realize who's in control (him)! If your wife is not a strong personality, you may want to consider a bigger dog, like a golden retriever or a lab, where they are almost always submissive to any human. As I said, my 5 year old nephew can easily handle my 80 pound lab. He just has to say "Toby, no!" and Toby almost bows in submission. Some dogs wouldn't be so easily stopped.