What should I look for when buying a used guitar?

First, play it if you can, make sure it feels “right.”

check to make sure the frets aren’t too worn down….
look that there are no cracks or damage around the headstock…. sometimes (often with gibson sg) people drop them and have them glued back together… but they lose sustain.

tune the open strings and then make sure the fretted notes are in tune too…. older guitars can slip out of intonation… and some cheep guitars never were to begin with.

and do as much research as you can on the model as to not get ripped off.

Yeah, check for dead frets (ones that don’t play notes). Also check to see whether the neck is bowed. It’s not something you get without trying a few out, but keep an ear out for the right tonality (like “feels right” above). They can vary from rich and swampy to bright and tinny.

All good ideas. Think of it this way. After buying the guitar (what’s your price range), are you willing to invest any more money in it, and how much? If so, some things like intonation or action can be fixed for a reasonable amount. Oh, and make sure the bridge, the thing that’s attached to the face of the guitar, isn’t coming up (if it’s an acoustic guitar). Which is another question: acoustic or electric. If the neck is warped or bowed, forget about it, unless you find some vintage 1930’s Gibson or Martin at a yard sale for $50 bucks, the cost of fixing the neck would be more than buying a decent new guitar. Also check the tuning pegs. They do turn, right? If the strings are real old, you might not be able to tune it and the intonation will be off. So tell us, please, acoustic (steel or nylon?) or electric? There are some issues to look for specific to each.

Speaking of tuning pegs—just because they turn doesn’t mean they’re good. Make sure they turn smoothly. Trying to tune a guitar with pegs that turn roughly is no picnic.

Thanks, folks. Helpful. I’m looking for an acoustic and price range is $200–300.

For $200/300, you can find a decent new guitar, and you don’t have to inherit other folks’ mistakes.
http://www.musiciansfriend.com
It’s always better to try one out first, but the site has a great return policy, and it’s easy to navigate.
Alvarez, Ibanez, Takamine, Seagull, and Martin have great entry-level guitars.

Classical, western, electric, steel, whatever the choice is, see if you can get the owner to put on a new set of strings before testing it. .012 if it’s a western, .010 if it’s an electric. Thicker is better, in my honest opinion (I use .011—.049 on electrics, .013 on westerns, .013 chromes on jazz archtops, and hard tension on classical guitars). Tune it properly, and follow the intonation advice mentioned before.

If this is your first guitar, I’d go for a decent used classical guitar with a solid top and a straight (you know; proper, not fully) neck. Perhaps an Alhambra.

If this is your first acoustic guitar, see the above paragraph.

If it’s a western guitar you’re looking for, I’d start with considering if preamplification and microphone is at all worth paying extra for. If you plan to use the guitar on a gig with a band, you’re best off with one spouting a piezo mic and a decent enough preamp. Amplifying a western guitar with a condencer microphone when playing with a band makes for a whole lot more potential trouble with feedback, even though it usually gives better results sound-wise. Then I’d look for a decent solid top, perhaps a Washburn jumbo (good value for money and good sound IMO).

And at the end – go with what you feel is right for you, practice long and hard, and have fun playing with others :-)