First off, thank you all for such incredible replies! I am glad I am not the only one who does this!
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.
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...
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.
I have never considered that one, but it brings up some interesting possibilities.
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?