Getting what you want out of a technology project starts with knowing what you want. One of the best ways to explore your problem is by building many quick and dirty (even non-functional) prototypes, and using this discovery process to refine and perfect your idea.
The Paper Prototype
Regardless of what you're developing, a drawing is a simple and effective tool. Draw, tape glue, cut and hack your prototype together, and then, pretend you're using it and ask the nearest human to pretend they're using it too, but don't give them any prompting on how to use it (that's what you want to observe). Yes, it's simple and low-tech, but it's faster and cheaper than software development, so you can prototype more versions, and focus on both core functionality and usability. Beware of feature creep, as paper is more flexible than your final product.
For a good rundown of how to get started with arts and crafts prototyping, check out this AcaWiki entry.
With screencasts and webcams, creating a video is easy, and it's not just for showing off your cat on youtube. Take your drawings (scan/photo/webcam them), along with your spoken thoughts, make a video presentation of your intended interaction, and explain as you go. Share it! Get feedback, check your ego, and defer to the best ideas.
Speed is king, and there are a lot of libraries aimed at Rapid Development that can help you make something "close enough" to test an idea in a timely fashion. Whether or not you want to rely on these tools for the final product, they can be great time savers for prototypes.
For generating wireframes and showing clients/users GUI's before the product even starts, consider checking out Pidico.
If you're developing Java web apps, Wavemaker offers an interesting cloud based solution that can speed up development time and help create quick prototypes.
Specifically for iPhones, LiveView is a tool aimed at getting anything on your desktop/laptop screen quickly to your iphone screen. Whether you're a graphic designer viewing Photoshop layouts instantly, a web designer quickly previewing pages, or a developer prototyping an app, the quick feedback on the device can get you a lot of input very quickly.
You don't have to be a big corporation to field test your product. One tool in particular, Silverback, achieves several goals (if you're on a mac). It takes video/voice recording of the user and a video of the user's screen, simultaneously. This captures the instant feedback and first reactions of your clients, testers, or simply your roommate or spouse.
If you're not a Mac user, or just want to hear some more ideas, check out these 24 tips from UsefulUsability.com.