Roast someone with a sense of humor. If they can't take a little criticism, they won't enjoy themselves.
Think about the guest of honor's negative qualities. Those are the things you want to point out and have fun with.
Stay away from hurtful comments. Everyone has a different as to how much they can take. If you know your subject well, you should know where that line is.
Keep it short. If you talk for more than 10-15 minutes, you'll likely be rambling and you'll lose your audience.
End on a good note. Even though you're there to make fun of the guest of honor, the event is actually to respect that person, so acknowledge that with a positive comment.