This post is a call for collective wisdom. I'm not teaching this year, but a former student wrote to see if I had any general advice about choosing a topic for a paper. I told him that I'm not used to answering that question in the abstract; I usually talk about the process with specific references to an assignment I've given and the readings for a course I'm teaching. However, I like to attempt formulating useful advice that applies to contexts other than my own classroom, so I said I'd take a shot at my own answer and then put the question to you, my wise and delightful and, may I say, attractive readership. Let loose in the comments! My answer, below, has in mind an advanced undergraduate assignment in English, but you don't have to limit yourself to that case.
Here was my first shot at an answer:
1. This page from Purdue is a decent starting point. It basically takes the idea of a good thesis and works backwards to some tips on finding a topic.
2. In my humble opinion, however, that page might be too quick to tell the writer to rely on his or her own thoughts. Much of originality comes from borrowing, and as long as reading outside sources is not forbidden, I recommend doing some reading as early as possible in the process. Seeing what published critics have said about a text can be a good way to find out what issues and questions are settled and which ones still provoke useful exploration. I am not suggesting a full research process, just the idea that research and topic generation can happen simultaneously.
3. Finally, I think that at this early stage, decisiveness is good in itself. You can leave yourself room to change your mind, but lots of topics can create good papers if you devote a lot of time and creativity to the process, leaving yourself space to rethink your own ideas and have other people react to them. Picking a topic early, even if the choice involves a little bit of forced decisiveness, can focus your attention in useful ways. I learned this primarily by means of a graduate seminar outside of my field in which the professor made every student choose a play to write about almost immediately (before we had read most of them) and write a project proposal only a few weeks later. It felt crazy at first, but then we all had a solid couple of months to research and execute the papers, and that was fantastic. Sometimes it's worth forcing the issue.