Every race listed in the Race Descriptions has a list of average attributes. The average attributes given for your character's race will give you a starting base for your character's attributes.
The method for determining your initial attributes is relatively simple, although somewhat time consuming. You just start off with a completely average character, and then fiddle around until you get what you are looking for. Use a scrap piece of paper for this, not your permanent character sheet, as you are likely to be doing a lot of erasing.
A new character starts off with a certain number of increase points, depending on which race you have chosen. ("Increase points" is just a hokey term used during the character creation process only, and has no bearing on later character development. If you can think of a better name, please use it.) These increase points are used both to improve your character's initial attributes, and to purchase your character's initial skills.
In order to increase an attribute by a single point, you must spend one more increase point than the tens digit of the number you are increasing from. For example, to increase from 40 to 41, or from 49 to 50, you would spend 5 increase points. Your total remaining increase points cannot be below zero when the character is complete. Be careful distributing these points, as you will need to save some to purchase skills.
In order to become above average in one area, your character typically drops below average in another. Every time you reduce an attribute by a single point, you gain back one more increase point than the tens digit of the number you are decreasing to. For example, by decreasing from 76 to 75, you receive 8 increase points. Decreasing from 70 to 69 only returns 7 increase points (the same as it would cost to go from 69 back to 70).
The reason for the "one more" all over the place is to avoid an easily abused situation. Without it, to increase from 1 to 2 (01 to 02) would cost 0 points, as it would from 9 to 10. Therefore, virtually no character would have a lowest attribute lower than 10, as you could get there with no expenditure of increase points, and you would not get back increase points for dropping below that level.
There are two limitations to this system: no attribute may be decreased below one quarter of its average level, and no attribute may be increased above twice its average level. Apart from this, you are given free reign to do as you wish with your character, to make him or her as individual as you are.
Note that there is no rule against increasing an attribute above 100, as long as the racial average is over 50. The average score for humans is 50 in all primary attributes, so their range is 12 (one quarter of 50, rounded down) to 100 (two times fifty), which is easy to compare other ranges to. This was done because human in the easiest race to compare other races against (probably almost everyone you know is human).
Some races may have an attribute which is so low as to be negligible in effect. This will be shown as a 0 as the average attribute. Since twice 0 and one quarter of 0 are both still 0, such attributes cannot be increased or decreased. No character may learn any skill if they have a 0 in that skill's primary attribute.
Some people prefer to create characters with an element of randomness to them. This can be achieved by selecting (possibly randomly) several attributes which will be determined randomly. Roll some combination of dice (the exact method is up to the player) to determine the initial values of those attributes. Then compute the number of increase points required to bring the character to this point, and juggle the remaining attributes (it may be desirable to alter the randomly determined ones by a point or three) so that the character becomes acceptable according to the rules.
If you are using the optional luck attribute, you can purchase luck points for your character at a rate of one luck point per increase point spent (since Luck is not a primary attribute, the "tens plus one" rule doesn't apply to it). As with other attributes and skills, this may be done only during the character creation phase. Recall that luck points are not recorded on your character sheet, but should instead be reported to your GM, who will track them.