This will overlap, but not replace, the essay on my website about character creation:
Some of you may have read that; some may want to, for the bits that aren't repeated here.
When Aristotle told the writers of his day to use kings or queens as the protagonists, he knew that audiences would respond to interesting characters...just as today, people *still* read about the British royal family, and the modern equivalent, "celebrities." If you or I trip and break an ankle, the world doesn't care--papparazzi aren't following us around--but if Oprah or Hillary or the Pope does so, it'll be on every news report and all over the tabloids. We are hard-wired to attend to newness/change/differences: exotic works (and thus, in SF, aliens.) But these aren't the only interesting characters...there's a sliding scale between the names everyone knows and a lot of people want to read about (unauthorized biographies of the famous do sell) and characters so dull that they kill the book. Somewhere between Emperor of the Universe and the bore who puts everyone to sleep is your protagonist.
Let's start at the bottom and get that out of the way first. Uniform characters (all good, all bad) are boring. They're well-rounded in the bad sense, like a greased ball bearing--they don't give a plot anything to cling to. You can use them in minor positions, in the same way you'd use a banana skin--for a more complex character to trip over--but not as protagonists.
The more average, ordinary, "flat" a character is, the more work you will have to do to make readers want to live with them...the more you will have to show that the character has the potential to surprise and excite. Some readers, finding a housewife, salesman, teacher, etc. in the first paragraph, will be remembering not only the dull stories in which that kind of character didn't have a plot to work with, but also the people he or she considers uninteresting. You can use an ordinary/average person as a protagonist, but you need to establish, quickly, that this person has the potential to respond in an extraordinary way and that you're going to toss him/her into the briar patch. On the plus side, readers easily empathize with ordinary characters, and find the character's struggles believable precisely because he/she starts out with no great abilities.
The more extraordinary (in ability, social position, political power) the character is to start with, the more easily he/she will 'hook' the reader just by being extraordinary, but you will have to work to show that the character is capable of believable struggle and can actually fail. So establishing the weaknesses early on prepares readers for this possibility and makes it more believable when your telepath who can read the enemy's mind 500 miles away can't tell that her boyfriend really loves her. This is why stories of extraordinary people often start when they were less extraordinary, but there are clues to the reader that more is coming.
The easiest character to make both immediately interesting and believable in conflict is the "sandbur" type--with a lot of plot-grabbing traits at all levels of awareness, and all levels of unusualness between average and extraordinary--ambitions, fears, talents, handicaps, moral qualms, animosities, attachments, etc. Not all of these need to show right away (in fact, the shorter the story, the fewer will be exposed to view) but this gives you a lot of potential for motivation and response.
(more to follow, but probably not today)