I'd thoroughly recommend going to any workshops on the subject run by Mick Ryan. He's done a couple of excellent ones for us at the Lewes Arms Folk Club in Sussex, UK (www.members.aol.com/lewesarmsfolk)
and is full of practical, helpful suggestions.

Mick is known for his ballad operas such as A Day's Work (First World War) and most recently The Navvies, as well as free-standing songs with a huge range of subject and mood.

Valmai (Lewes, Sussex, UK)