1. Word of Mouth.
2. Price. It always takes longer to record than you think, and if you feel pressured financially the recording will suffer. Pick a studio that fits your budget.
3. Availability. You'll perform better if recording sessions can be scheduled at times convenient for you.
4. Engineers. They should be experienced, attentive, helpful, willing to do what you want, and willing to guide you when you're not sure. Remember, you're doing the hard part, it's your ass on the line, and you're paying them to work for you!
5. Facilities & Equipment. A studio should have at least:
   1. Pleasant acoustics and a comfortable performance room.
   2. Good microphones. Look for the names Neumann, AKG, Sennheiser, Schoeps and Beyer.
6. Avoid non-standard recording machines and work stations. If they're a type that's not in widespread use, you'll have trouble if you ever want to modify or add to your original tracks in another studio. ProTools and Digital Performer are always safe bets.
7. Analog or digital? I only bring this up because some studios use it as a selling point. In my opinion, after you subtract out the hype and ideological posturing, this is the least important criterion for choosing a studio. (See my comments under "Using Analog Tape to Warm Up Digital Recordings").

With so many studios around, there's one for every taste and budget. And there's plenty of good gear around besides the specific names I've mentioned. The suggestions above are not meant to be definitive; just a starting point.