Originally Posted by Peter Graham
Find people who can write. They don't have to be published or even aspiring novelists, but they do have to understand the mechanics of writing.
I don't completly agree with that. Never rule anyone out, unless you think they won't be honest because they don't want to upset you - such as family members.
A person might be good at spotting continuity errors, they might help you find sentences which are difficult to read. A person who simply reads your story and says I didn't like/understand something or I loved this/that about it.
People who can write might be better at all that, but I would look for a varied bunch of readers.