The Margarita is a drink that everybody knows, and everybody probably has a different way to make it too. I'm a big fan of making it on the rocks. I'm not against making a blended version, but sometimes it's easier not to have a blender to clean afterwards. I like salt on my rim, but feel free to use sugar too.
When grabbing a tequila for this drink go for a blanco (aka silver) tequila. Some people use a reposado ("rested") tequila, one that has been aged between 2 and 12 months, or occasionally even an añejo that has seen even more age. An aged tequila doesn't add much to the drink and can even take away some of the agave notes that you get from an unaged version.
Grab Cointreau or another high quality triple sec, don't use a bottled mix or a bottom shelf bottle. You'll thank me for it.