Today is the What's Your Process Blogfest! Be sure to check out all the other great entries below to learn more about how other writers work their magic.

As mentioned in this post, I have to have some idea of my characters before I start a draft. I also have to have a basic plot outline. I use a tool called Freemind to map out my plot (see image). I have one main "bubble" with my title that leads to three other bubbles-- Act I, Act II, and Act III.

Act I leads to 2 bubbles: 1) snapshot of hero's old life/opportunity offered, and 2) hero resists opportunity.
Act II leads to: 1)Learning about new life/villain setup, 2) build to climax/try-fail cycles, and 3) climax and ultimate fail.
Act III leads to: 1)Ultimate climax and success, and 2) wrap-up
Then, under each of the bubbles listed above, I write a basic paragraph of what happens in that section. VERY basic. I've been known to write such epic statements as "more bad things happen."
Once that's in place, I begin the writing of my first draft. It usually completely terrifies me. I write from beginning to end--I can't jump around and write scenes out of order. The outline gave me an idea of how to structure the plot, and now I let the actual events of the story work themselves out. It tends to be very messy, but not nearly as messy as when I have no outline to give me a general plot arc.
Sometimes I get a quarter or more through the writing and realize I'm telling the wrong story-- it happened with Devs. So I go back and rewrite it. Sometimes I'll write a scene and realize I took the story in the wrong direction, so I'll cut and paste it into a "cut scenes" document and write a scene that goes somewhere else. Yup, sometimes I edit in my first draft. No point in finishing a story that's wrong, right?
I write in Microsoft Word, and I turn on Document Mapping as I go. I create chapters that at this point mean nothing except as navigation points. For each scene I write (sometimes there are several per chapter), I write a brief description of what happens and put it at the top of the scene as a header. I use Heading Styles so the descriptions show up mapped in order to the left of my document. This makes it easy to jump around to certain points in my document.
It also serves another purpose-- when I'm done with my draft, I take each of my scene headings and make an outline of them in Freemind. There, I can see my storyflow from beginning to end, and see how I need to fix it.
But that's a discussion for the next post-- rewriting.
Now go check out what everybody else has to say. And enjoy!