I am finding myself in an uncomfortable position of contradicting Xiao Hu, but mnemonics work great for some people, myself included. I completed the Tuttle book http://www.amazon.com/Tuttle-Learning-Chinese-Characters-Vol/dp/080483816X in a few months and can testify that their system is very effective. You need to practice daily, though. A popular free flashcard software called Anki is available on most platforms and also has a web-based interface. It works great for reviewing the characters. Anki has the whole deck uploaded for the Tuttle book, so you do not even need to make your own flashcards (people less lazy than myself will say that you _want_ to make your own flashcards).

For reading, there is a series of small books called "Chinese breeze" which you can read when you master about 300 characters (that is, after less than a month of daily study - in the beginning, stydying 20 characters per day is not unreasonable, since you start with simple characters). Being able to read a whole book in Chinese without a dictionary, albeit simple, will do wonders to your confidence. These books also include a CD with the audio version recorded at two speeds.

Do all that, and what Xiao Hu said, and you will be in good shape. Most importantly, do _something_ Chinese-related daily.