Buy a really good blanco (white) tequila. It should be 100% agave at the very least. There are two reason's for choosing a pure agave tequila. The first is flavor. The second is how you will feel tomorrow. Remember college? You slammed down shots of Cuervo Gold then looked for the license plate of the truck that ran over you the next morning. Or worse, a roommate telling a story about fishing you out of the bushes behind the frat house.
By Mexican law, for a spirit to be called tequila, the alcohol only has to come from 51% agave sugars.
Since it takes about 8 weeks to grow sugar cane or grain, and about 8 years for a blue agave to mature, volume producers like Jose Cuervo and Sauza blend sugar cane or grain alcohol to save money. It's like mixing moonshine with tequila then using food coloring to get the gold hue. No wonder tequila gets the title for worst hang over ever. I promise you that if you use a pure tequila you will not be needing pain killers in the morning. Among my favorite tequila's are: Herradura, El Tesoro, and Don Julio. If you are interested in what goes into making great tequila and their different classifications check out Ian Chadwick's web page. I learned a ton from this site and a few of the books he recommends.
For this margarita I like to use a liquor from Mexico called Damiana. This is made from the shrub Turnere diffusa growing in the Baja region of Mexico and California. Damiana has a distinctive flavor all its own. It contains the chemical damianin which is known to have a relaxing effect on the central nervous system. Talk to people in Cabo San Lucas and they will tell you Damiana makes for the "Original" margarita. The bottle is symbolically fashioned after an Incan Goddess of Fertility. Damiana is a traditional wedding gift for the bride from the groom's mother.
A good triple sec, a whole lime, a wedge of lime, and fresh ice round out the list of ingredients. Even though Mexican folklore says "The Original Margarita" used Damiana in lieu of triple sec I use some anyway. My favorite margarita:
1 oz Damiana
1/2 oz triple sec
Juice of 1 lime
The Fixin Part
Fill a cocktail shaker about 1/3 - 1/2 full with ice
Roll lime to loosen up, cut in half, and squeeze both halves over ice
Pour in tequila, Damiana, triple sec
Cover and shake
Salt the rim of your glass if you like
Strain into cocktail glass filled with fresh ice
If the rim isn't salted sprinkle a pinch on top
Add lime wedge
I use new ice in the glass because I don't want much water diluting the drink. You can throw this into a blender if you prefer a frozen version. I prefer mine on the rocks.