Show me the Rules
Elizabeth Bear has a really great entry on 'Show vs Tell':
What it means was that you actually can narrate or exposit anything, as long as you do it engagingly. Anything, that is, except one thing. Character development and motivation; these are things that have to be demonstrated, grounded. The reader has to be made to feel them. They have to be in the reader's gut; the reader has to be in the character, he has to comprehend the character. You discover the magic of the thing tanaise�called "inpositioning," of making the character's motivations explicit in his actions. Of showing the disconnect between what he does, and what he says (the single best teaching example of this I can think of is a scene in Roger Zelazny's The Guns of Avalon between Benedict and Corwin�which includes what I consider to be one of the best paragraphs of oblique characterization in fantasy:�"I glanced away and so did Ganelon. When I looked back, his face had returned to normal, and he had lowered his arm." It's a paragraph, two sentences, twenty-three words, that completely define two characters for me. Taken out of context, not so much, but in the place where the two men have been shown, and their relationships demonstrated, it's breathtaking.) and making the reader understand the three-dimensionality of the character by showing him in parallax view. If he jumps when you close one eye, you can see him against the background of stars.
I've been going to post this, like, forever, but I also wanted to add some pithy and enlightening commentary of my own--about show vs tell, about the unpacking process of becoming a writer, about rules and their places. But, heck with it, that'll take, like, forever. Just go read what she wrote.