I like to mix when I haven't had my head in the phones for a day. First thing--have the ears clear and sensitive. Since I work in a computer DAW, usually there is a mix of sorts that was up for tracking. I first find the track that seems to need to get pushed too far to be heard and scale levels back on everything else until I find the headroom I need to work with everything. From that point, I just play. Sometimes I start with drums, bass and lead vocal and then add the rest in a track at a time. I try to get a good mix on the whole rhythm track before I add solos and the single line/solo stuff. Once I get those levels right, I add the rest of the tracks. From there, I listen and see whats clear and what is getting masked. If I have two guitars that are competing for space, I pan them apart, and sometimes do different EQ's. There is a whole phase where I mess with EQ and panning until I find what is needed to get the separation I want.
At this point, I add some verb and sometimes delay to taste and let the mix sit for a day or two. When I come back, the first listen usually reveals any glaring mistakes, if I have made them. Then I fix what needs fixing and begin listening on different monitors. I even walk around the house with the mix cranked, to see if anything is missing as I get away from the nearfields. I also burn a CD and listen to it in my car for a couple of days.
After doing this, i come back for one final phase of adjustment. Maybe the kick seemed too loud or quiet--maybe I felt the voice was to high end-ish--whatever. I make final adjustments and commit to that mix.
These days, I work with the mastering after that, but I am still a long way from calling myself a mastering engineeer, so I'll leave it at that.