I found this just tonight and thought it was really good - most of it I'd read/thought of before, and most of you probably have too, but it's worth a read I think. :) [anti-shurtugal.andontie.net]
I don't think there's a single definition. I do think people tend to throw the term around too much nowadays; not every badly-written character is a Sue (though that doesn't mean they aren't annoying).
I'd clarify Ebby's comment. I've seen bad things happen to Sues. What I haven't seen is a Sue getting bad results from her own deliberate actions. Sues don't make mistakes.
That's something Limyaael hit on years ago and I think it's one of the best indicators ever--the character's perceptions are identical with objective reality.
The Sue might be hurt. But the Sue is never wrong.