First off, thank you all for such incredible replies! I am glad I am not the only one who does this!

Quote Originally Posted by valadil View Post
I love having old PCs as cameos. I am a lazy GM and a poor actor. When I recycle a character I played before, or even watched someone else play, I get an NPC who is fully fleshed out and who I can express well. The game is better for it. I don't think the players fault me for being a lazy game prepper if it means I perform better.
I agree; it helps to have a fleshed out character that you know well. If the PC's ask their favorite color, you have an answer and reasons why.

Quote Originally Posted by Freelance GM View Post
So, especially once a campaign ends, I ask each player what that character continues to do. This leaves the door open for future cameos.
The other character's legacy was a protege named Miles, who became a significant NPC in my previous campaign. Miles has a distinct appearance-He established himself in my player's memories as a deviously cunning and frighteningly competent crime lord, but a dependable ally, so long as your interests aligned with his. At any rate, my PC's liked him so much, I've started finding places for him in my next campaign.
Both great points. This further fleshes out a PC, and tailors them for cameo roles they would excel at! I also like the idea of an overwhelming favorite; I tip my hat to you, as my players are less fond of my NPC's and each others characters...

Quote Originally Posted by DragonBaneDM View Post
I'd save the reveal for the end, making it more fun and dramatic for everyone.
I don't "reveal" Cameo's, but I do make them increasingly obvious depending on the nature of the Cameo. Normally there is a tell that was a signature of an old PC: A weapon, unusual hair, catch phrase, lucky hat etc.

Quote Originally Posted by Erth16 View Post
One campaign ended with the party becoming gods, as such players later asked if they could worship them, and once a character had one come to him in a vision.
I have never considered that one, but it brings up some interesting possibilities.

Quote Originally Posted by Jay R View Post
Don't plan for a specific character to have a cameo.

When the plot calls for an NPC to show up with a particular clue, or to be rescued, decide if it's reasonable for that role to be filled by one of the old characters.

For instance, don't just decide you want to do a Superman cameo. But if the story calls for them to bump into another hero, look over the options for one who fits. If they're in Metropolis, go ahead and use Superman. But if they are in Gotham City, it should probably be Batman

Similarly, don't just decide to use D'Artagnan. If they are supposed to interrupt a swordfight, but they're in old California, it should be Zorro.
This is the nuts and bolts of cameo mechanics I needed to hear. Everybody provided examples of cameos, the hows and the whys, and I think this hit that nail on the head. Recently, I cameoed a former PC of mine as an NPC. I was introducing a new PC to the party, when the party was on a river in BFE jungle where Grippli are native.
I needed:
1. A Local
2. That could protect themselves and another character
3. That had means to travel in the area
4. That could provide for themselves and another character

I had:
1. A grippli inquisitor who never leaves their home unless ordered by their deity
2. Who was 2 levels higher than the party last time they were a PC
3. Who crafts beautiful canoes and is an avid paddler
4. Is an expert angler

It would have been hard for me to build a character much different from the concept I already had. Based on the replies, I believe cameo's are an important tool that all DM's should have in their toolbox. Like any tool, they are only fit for certain jobs, but when they fit they are the right tool for the job and should be used. When I need a baseball player and religious defender, I have a paladin for that. When I need a self sufficient frog to paddle a canoe, I have an inquisitor for that. Every character concept I have seen and played is a tool that can and should be used when needed.

One thing not addressed is how to cameo other players PC's. It is bad form for a DM to roleplay a PC, and a cameo can encroach into dangerous territory. Any advice on how to play a PC that is not your own without gravely offending and insulting the player?