I recommend the book "Start Small, Stay Small: A Developer's Guide to Launching a Startup by Rob Walling about this topic. It pokes every aspects of starting side projects including how to find something worthwhile to create. It really changed my perspective of how to find out if a side project could work or not.
I second the book and recommend the podcast that Rob does with another guy named Mike Tabor. It's called Startups for the rest of us, lots of wisdom in that library! You can even send them questions and they'll do an entire show in reply.
