I agree with what most people posted. Living in China I've learned to bargain and bargain hard.

- Take lots of small bills with you so you have exact change. I usually put the majority in a separate pocket/pouch in my bag and just keep the bare minimum in my wallet so when I go to pay it doesn't look like I have tons of cash on me. Makes me feel like an a** if I bargain to the death then show them a wad of cash
- In bargaining countries, almost everything is up for negotiation. If you're not sure, you can always ask if they can do a little bit better or mention that the item is a little expensive. It'll be pretty obvious if the sticker price is going to hold
- Don't listen to hard and fast rules about 10% or 50%. As people mentioned, sometimes vendors start with outrageous prices. Decide what you want to pay before starting to negotiate and don't go above that. A good deal is a relative thing.
- A good way to find out bottom prices is to bargain very hard at the first stall you see that has the item you want. Walk away at a very low price and if they don't change their mind you know you have to increase the price slightly at the next place.
- Learn bargaining culture. Some countries it helps to be firm, some they prefer a more friendly style - ie in Thailand you're going to get a better deal if you're nice and smile, in China you can act offended and throw the calculator (not recommended but it does work)
- Volume always leads to price decreases. I usually find out what the cheapest price is for buying one, then negotiate for a larger volume
- Definitely don't admit to being American - that leads to an automatic price increase
- Don't get frustrated. It's all in good fun. Can't tell you how many times I've seen (American) tourists at the fake market here getting annoyed by the barganing so just agreeing to pay the first price. Let's face it, you're not going to be buying anything essential so if you're not having fun just walk away and try again later