Good shape 
"Good shape" uses local stones efficiently to maximize tactical advantage.
- efficiency ( = degree of success / stones used)
- establish a connection
- make eyes
- increase liberties
So, stones have good shape when they are connected or will easily be connected, make an eye or will easily make an eye with a minimum number of stones, and maintain a certain amount of flexibility.
Alex: It's important to note that "connection" here implies the ability to maintain a connection "through" the shape, from one end to the other of the area of the board it occupies, and not between all the stones (or, in some cases, even between any two particular stones). Quite often, maintaining this connection in face of an attack means abandoning or sacrificing some of the stones. If all the stones in the shape were unable to be separated from one another, it is unlikely the shape would fulfill the "efficiency" criterion.
: Shape Up ! is the title of a book on shape and esp. Good Shape by Charles Matthews, published online on GoBase.