Arghhhhh! Writing a synopsis is hard. Be prepared for agony. Save yourself time and effort by getting a copy of Pam McCutcheon's Writing the Fiction Synopsis.
The synopsis is not a blow-by-blow of your plot. Think feelings, think change, think straightforward. I won't delve too deep because, frankly, Pam McCutcheon's Writing the Fiction Synopsis is so excellent a resource that you should just break down and buy it.
Here's a real-life example of a synopsis (html layout). Or, view a PDF of this synopsis. I hate writing the synopsis, and I'm sure that many people do them better than I do, but this book sold, so it can't be hideous.
Further Thoughts on The Synopsis
I originally posted this page in 2002. Now it's 2006 and I have written many more synopses and talked to many more authors and writers about these pesky things. So, herewith, additional thoughts on the synopsis.
A synopsis is a sales tools. Full credit to Candice Hern because I heard her say that first. She's right. Although a synopsis must be free of writing errors, it need not be prize-worthy writing. (good writing, yes. Prize-worthy, no.) Its function is to convey the emotion of your story and the progression of your characters in the story. At the end, readers should know who your charaters are, the tone of the story, and the emotion of your story. They should know that your story has a coherent plot and a satisfying ending.
And who are these mysterious readers? Agents, editors, marketing and the art department. Once your story has sold, your synopsis will go to marketing (you should be so lucky) and the art department, the talented folks who will create your cover. Chris Keeslar, an editor at Dorchester Publishing once said to to me, "I have never bought a book on the basis of the synopsis alone."
So, as you're stressing over the synopsis, remember its purpose. Convey not the plot points but the emotional points. For a crash course in the synopsis, check out Miss Snark's Blog. Check the archives for the crap-o-meter and read, read, read. Marjorie Liu wrote a fantastic blog post about writing a synopsis. Read it.
One thing I do now that I didn't before, and this is even though I'd rather pull out my fingernails, is start writing the synopsis early on. (cf: Marjorie Liu's post noted above) Why? Because it gives me a big picture to follow while I'm wallowing in the minutia of writing chapters. I keep it short but specific as to what happens. And here's the benefit: The moment my synopsis doesn't track what's happening in the chapters, I know I have a problem in the chapters. Yes, that's right. A problem in the chapters. My characters have gone off track or aren't behaving consistently. This early synopsis changes a lot, but working on it has proven invaluable.