Question number one when picking out an air compressor is figuring out exactly what you will use it for. High pressure air compressors are a must for things like sanders that require a lot of power, but smaller tools like nail guns don't need an air compressor with so much oomph.
Budget is of course the next thing you have to consider. Air compressors vary wildly in cost, depending on brand and performance, but the most expensive isn't always the best. Do your homework before you buy, and when budget is a major concern, think used.
Next, weigh up what style of compressor is going to work best for you. A direct drive air compressor is smaller and will survive for around five hundred working hours. If you won't be using your compressor often, direct compressors may be for you. If you have a heavier work load and need a high pressure air compressor, consider a belt drive compressor instead. You'll need to give the oil a change on these after five hundred hours of use, but they tend to last longer. The downside is that they take up more space, so consider your options carefully.
What about power? Look for a compressor that has more horsepower than the tool you'll be using the compressor with. Likewise, make sure your PSI is adequate for your tools.
Last but not least, you'll need to choose a tank. These come in gallons, from two to one hundred; the rule of thumb is the bigger the tool and the heavier the use, the bigger the tank.
Budget Air Compressors
Shopping for air compressors is a little like shopping for cars. You've got to work to find a deal. The price variations are wide, and in some cases, seemingly arbitrary. Know your brands and what you need from a compressor before you hit the stores.
You can save even more dough by checking out used air compressors that have been reconditioned. These compressors have been repairs and spiffed up as good as new, but for a fraction of the price. Make sure you go for one with a warranty in case you have any trouble.