Presumably you're already familiar with all the stuff at http://www.carrionfields.com/search.html?keywords=roleplaying, like the page on character creation, and are looking for something more.

First question is: have you been around other players who impressed or interested you by how they played? How would you describe what it was that you noticed? What happens when you try doing that kind of thing? If you can find things you admire (or hate, or ...) about other people, and work them into your character's person, I think that can help.

Personally, I think the essence of good roleplaying is in evoking emotions. Other people might have different approaches (that's why I started out with a couple more general paragraphs). But, if you really get into the "I'm a different person" thing in the right way, it matters to people, and engages them. And, I guess, one way to get into the whole roleplaying thing is start with things that matter, emotionally, to you, even though they don't require anything of modern times or situations.

It doesn't hurt if you spend a little time, when you're not playing, thinking through stuff like this.

Also, there's plenty of stuff out there on the web about characterization, even not all of it applies to muds. For example: http://www.rachelsimon.com/wg_character.htm

Do a google search on characterization characters and you'll find lots more like that. (A lot of which is much better than my advice.)