Afshan Kirmani has posted the first a two-part article on how to design better online forms. You can read the full article on Boxes and Arrows in which Afshan uses the example of signing up for a web-based e-mail account to highlight the components of a successful form:
Affordance – clear entry points for the applicant, addressing security issues, consistent design between website and form, a brief overview of the forms requirements and the ability to save form content and continue later
Orientation – clear form titles, progress indicators and progress feedback (especially on longer forms)
Chunking – logically grouping and labeling related parts of a form to promote readability and ease content digestion as well as breaking longer forms onto separate pages