Ideally the breeder pays someone not involved with their kennel, to come in and score the pups, and you get to see the test results, comments and scores. Spending time around the pups and watching how they interact helps.
I also think if the owners are honest about the temperament of the mother and father and you can interact with the mother and father that's good.
I also think it's important to just LISTEN. The breeders, if they are legit, will be very proud of their dogs and tell you very clearly what their traits tend to be and what sort of situation suits them best.
You can pick up valuable clues from people just by listening. Offers to throw in the dog's parents 'for free' if you take a pup...bad sign. Pups are itching like mad, bad sign. Has a pup available IMMEDIATELY, but ONLY if you pay TODAY...bad sign.
A friend asked me to come help her pick out a pup. The sire was like Yosemite Sam's camel - the owner screamed louder and louder, 'Sit! SSSSIT!!!!' and when he finally got the dog's attention the dog peed on the carpet. So he was either like totally not paying attention or once you got his attention he was afraid of you. The mother mostly hid under the dining room table having a little problem with submissive peeing.
I told my friend to not pick out any of the pups, that the temperaments of the parents were not good. She took one, and spent I think 80 obedience trials to get the dog's cd. Eighty. Amazing.
My favorite pup was playing with her brother and they were both growling and playing pretty excitedly. The angle the brother was at, he somehow was bumping her head on the book case behind them. I watched to see her reaction, she got her head bumped only a couple times and without any further ado, hopped up and walked away. Her sister in the same situation stayed there, and got more and more frantic and started biting at the brother pup and kind of shrieking. I picked 'Gee, if I'm getting by head banged against the book case, I think I'll move to somewhere else'.