Writing good hooks is the most important GM skill because they answer the biggest question in the game: Why are we doing this? Here's why hooks are important, and how to use them.
As human beings, naturally the GM and the players interact. They tend to be friends sitting around a game table, shooting the breeze.
But once a typical role-playing game starts, the GM interacts with the players through the story. The players don't care about the GM, because they've formed a party of characters, and they interact with the story through those. That creates a situation where the GM doesn't interact directly with the players. The GM doesn't say "you guys should take your characters into the dungeon and have them search for the last holy sword." Instead the GM creates a story about the dungeon.
The GM's story elements are NPCs, villains, monsters, events, the setting itself, and so forth. In order to draw the players' characters into his story, the GM has to create hooks that bridge characters' capabilities, irrationalities (motivations) and connections into his story. Once the game starts, the GM has to use hooks to move things forward.
You'll notice I said "irrationalities" instead of "motivations" -- the experienced GMs reading this blog will find that to be a strange turn of phrase. Motivations makes us think of things like "take over the duchy" or "get rich" -- stuff every good player should build into his character. "Irrationalities," admittedly a less evocative term, implies all kinds of flaws in a player's character's logic; but they're far more numerous.
Any kind of irrational bias can turn into a motivation. Your character likes McDonalds food? His local McDonalds shows up on the news: The manager has vanished and three employees were found dead and exsanguinated. We've used an irrationality to make a few safe assumptions: He goes to a nearby McDonalds often, and he can recognize the manager and some of the long-term employees. We can generate connections to NPCs, a unique capability (he knows the manager, at least a little), a setting, and a classic urban fantasy story -- vampire hunters!
Our initial hook is "You used to work in the High Mountain Forge before you became a fighter. You encounter an apprentice you knew from your time there, Baldrick. He is getting drunk at the bar, and looks very much down on his luck. This is surprising to you, because he was so talented that you assumed Baldrick would have become the forge master by now. When he sees you, recognition and hope spread across his face. 'Radlon," he says, "I see you have become a mighty warrior. But for me, I have only ill tidings. The forge has been lost. Monsters from the Eastern Mountains invaded the area and we abandoned it. Carrying what we could on our backs, we dared not unseal the vault. We thought the monsters would never be able to get into it. And we would have been right, except that now Ka-Thar the Black was seen flying Shadowtongue into the range, and we fear he has gone to break into the vault to steal the last holy sword." He orders another ale as you try to recall everything you remember of High Mountain Forge. Here's a map that you can use as your character's memory of the place. It's sketchy and some places are missing or mis-remembered, but it's mostly right."
I believe that the hook is the most crucial skill a GM can have.
A story hook is how the GM connects the characters to his story and makes the players care about it. Without good hooks, here's what happens:
The GM starts railroading the players. Hooks are not railroading -- linear stories and story hooks are not railroading. Railroading is when the players want to do other things, but the GM won't let them. And why would the players want to do other things? Because their characters aren't hooked into the GM's story! Have you ever seen this happen? A dungeon crawl story is presented without hooking the PCs in, so the players decide that they want to go explore the Forest of Shadow instead (they may say "first" but they mean "instead"). There's no compelling hook for the "Explore the Forest of Shadow" quest either, but the players (and perhaps their characters) are actually eager to fight the kinds of monsters they think are in there. The GM railroads them by letting them explore the Forest, but not giving them any battle encounters, compelling stories, NPCs, or dramatic events. The GM fills time by saying "OK, you're in the forest. There are trees. With shadows. What do you do?" Eventually, the players point their characters at the dungeon just because there's likely to be an actual game there.
Since there is no compelling hook, the players set their own objectives. Absent a personal connection, they only care about what's in it for them. "Why are we saving the princess? Oh yeah, because her daddy's rich." The players approach the story coldly, as mercenary "murder hobos." That is, people with no fixed residences, who wander around, killing things and taking their stuff. The players race from battle to battle, and attempt to dominate and push around all the NPCs, regardless of how sympathetic, awesome, or friendly they're supposed to be.