After seeing a little about how the election process has been going so far, I have the following advice for other communities about to undertake the same process:
Domain knowledge is important up to a point: Moderators should be able to recognize what topics are or are not appropriate, whether questions are tagged correctly, etc. However, the most knowledgeable users are not necessarily the best choices for moderator. As Joel said in one of the podcasts, you don't take your most skilled programmer and put him in charge of passing out cookies at lunchtime.
Have a community wiki question for moderator selection where each answer corresponds to one candidate. Nomination is a simple matter of creating a new answer, with the nominee's name as a heading (
# in front), with links to their profile on both meta and the parent site. Each candidate can then edit his/her associated answer to give a brief description, including what time zone he/she lives in and what hours he/she will most frequently use the site. Or he could decline the nomination by editing out his name and adding it to a list of declined candidates in the question itself. Discussion can take place in the form of comments on each answer. After selection has finished, this question can remain as the 'get to know your moderators' page.
Voting is done by upvoting every candidate you approve of. This has the benefit of ensuring that those selected are trusted by a large proportion of the community. (voting members of the community, anyways).
The scope of a moderator's responsibility is very different in a new site vs a mature one, since the site is in bootstrap mode (some tools are trivial to access), but there are no high-rep users (some tools are impossible to access).