The first and most important step, is to write a fantastic novel and edit it thoroughly. Only send your very best work because you don't get a second chance to make a first impression. Competition is fierce so your book needs to be not only brilliant, but grammatically clean and structurally sound to get noticed. Never send a first draft. Ever. No one is that good, and if you think you're the one exception, you're wrong and such arrogance will not serve you well in this industry.
Now to the do's and don'ts!
It's a careful balance of professionalism, knowing your audience (the agents), enthusiasm for your work, and knowing how to put it all together. Learning how to mix all this and come out with an outstanding query letter is not easy.
Don't confuse enthusiasm for your work with overconfidence.
Don't say things like: 'there isn't another book like this on the market', or 'this will blow away Twilight', are red flags, not good points. If your book isn't like anything on the market then an agent is going to wonder if they'll even be able to sell it. Making a statement like the second one is arrogant and may come back to take a chunk out of your posterior.
Do express it's uniqueness.
Do be respectful of other author's work when making comparisons, don't put their book down.
Do make sure you're accurate in your comparison. Make sure you've read the book you're comparing yours to.
Don't say you're the next J.K. Rowling or Stephen King.
Do say your work is in the vein of such and such, or has the stylistic spice of such and such, or that your style of suspense or intrigue is reminiscent of such and such's work.
Do keep the query short and to the point. A query should fit on one page and involve no more than four paragraphs.
Don't tell us who loved your book. It won't help unless it was a well known author who is endorsing you.
Don't tell us your life story or include personal information not relevant to your writing.
Do list literary awards, publications, relevant education.
Last, but certainly not least:
Do read and follow submission guidelines.
Best of luck in the querying trenches!