Judge this book by its cover. If you have a specific idea in mind for your cover, check for embossing or imprints that may get in the way or require a work-around. Look for water damage or separating layers of book board under the cloth or leather that may need to be reinforced before you create your masterpiece. Also make sure the cover is firmly attached to the spine.
Examine the binding. A prime candidate for altering is a book with stitched signatures (as opposed to glued) whose stitches are still strong.
Look for healthy pages. Age on a book is not an automatic disqualifier (often quite the contrary), but you want to make sure the paper has aged well. Coated pages (like those found in old encyclopedias or text books) age very well. Uncoated sheets can become dry and brittle over time and may crumble when painted on or glued.
Sniff carefully. Sometimes a book may appear fine, but the nose knows if the tome has a hidden secret. A musty smell, smoke or animal odors may indicate a book has been mistreated or is otherwise not fit for altering.
Know the cost. First editions and current best-sellers are not always the best choice to use as an altered book because the cost and overall value of the book may be more than you want to sacrifice for your art. Yard, garage and tag sales are great places to find sturdy, inexpensive books to alter. Also check your local library stores that sell older, out-of-date books for a fraction of the cost of new. Many alterers set a price limit for materials no higher than 50 cents, but I have been known to pay up to $5 for a book with a great title that inspires me.
Read a page or two. Inspiration can come from anywhere, including the book itself. While the book's title is an obvious place to start, chapter titles and randomly opened-to pages can also act as your muse. I have actually read an entire book before starting on the alter, but I don't necessarily recommend it--this leads to library building and not art creation!