Once you've decided to do the whole portable generator thing, you have to figure out how you're going to power the devices you've chosen to run on the generator. There are two choices available to owners of portable generators. The cheaper but less convenient way is extension cords. The more permanent and convenient solution is a transfer switch.
Extension Cords
If you're going to go this route, it is important to make sure you've got enough extension cords to reach and power everything you want to power. If you don't, you'll be restringing cords all the time to plug something in. We almost made this oversight when Ike came in, but we were lucky that we found some cords at both Harbor Freight and Sears Hardware.
However, the number of cords you have is not as important as the type of cords you have. Thin cords with small gauge wire are not the best choice for multiple reasons. First of all, if you have a large load attached to the end of long, thin cord, you're putting undue strain on both the generator and the device. The smaller cords provide too much resistance for too much current flow over too small a wire. You need to make sure you have quality heavy gauge cords to reduce resistance and ensure the attached device can draw enough current so that it isn't damaged. This is critical for refrigerators, freezers, portable or window unit air conditioners, and other high-draw appliances. The minimum acceptable cord size should be 16 gauge, and that should only be used to power low-draw things like lights and fans. Higher draw items - like your fridge(s), maybe your entertainment center, and other units like that - should be on a minimum of 12 gauge wire. Portable and window air conditioners should go on 10 gauge extension cords.
Another consideration of extension cords: where do you get them into the house? A door? A window? One of the most creative methods I saw during Ike: the next door neighbor disconnected his dryer and ran his cord into the house through the dryer vent hole. That wouldn't work for me, as my dryer vent takes several bends and isn't a straight shot through the wall, but that might be a possible option for you (it would've worked great at my old Katy house). For this house, we were able to crack a small bay window in the breakfast room and run the cord in that way. As such, we were able to plug the small gap with towels and leave the doors completely closed. This also mitigated the security risk of the door or having to crack a larger window.
Transfer Switches
If you want a more permanent installation and want to rid yourself of the hassle of extension cords, install a transfer switch. There are two types of transfer switches: manual and automatic. Automatic switches are generally made for and installed with automatic whole-house standby generators, and I've not seen any available for portable generator use. For portable generators, there are manual transfer switches. Here's an example of one of the units available.
So what does a manual transfer switch do? Essentially, it wires into your circuit breaker panel. When the power fails, you kill your main service breaker so your generator isn't back-feeding power onto the grid, plug the generator into the transfer switch using a single large cord, and fire it up. You then flip the breakers on the transfer switch to power the attached circuits. In other words, plugs and switches in the house that are on the energized circuits work just like they do when the regular power is on. No extension cords required! Depending on what circuits you decide to connect, this could allow you to run your ceiling fans and overhead lighting rather than having to settle for reflector or other lamps and box or oscillating fans! This also solves the problem of having extension cords penetrating through a window or door.
The unit pictured above is capable of powering 6 circuits, but there are units available that will power more. It is also meant to be installed indoors, like in a garage. My service panel is located outdoors on the side of my house, so I'll have to get an outdoor-rated unit if I decide to go this route. If you decide to go this route, you will still need to figure out what devices you want to power and how much power they consume, just like you do if you're going to run extension cords. However, in addition to that, you need to figure out which circuits you need to power in the breaker box to power the appropriate devices. If your house is like mine (with no rhyme or reason to how things are connected to the breakers), this could be a little time consuming. After that, you need to hire an electrician (unless you're one yourself) to wire the switch into the breaker panel.
At time of this writing, the transfer switch above was selling for $250 at ElectricGeneratorsDirect.com, and then you have the expense of the electrician actually wiring it up. I really wish we would have had one of these available to us during Ike, as it would have made life much easier and less perilous, as I tried on several occassions to trip over the bundle of extension cords we had laying around. Also, I found myself flipping switches all the time out of habit, and obviously nothing happened. It would've been nice to have lights in the bathrooms for when we were showering or getting ready for bed, and having one of these gems powering multiple circuits would have done the trick nicely.
At this point, though, I haven't decided I want to do one of these. Why? Because I might bite the bullet and install a whole-house standby generator. If you're curious about those, please see my article on that subject.
Update 8/30/2010
The argument has been settled, and I did end up pulling the trigger on a whole-house standby generator. You can find more information about that in this article.