I already briefly mentioned Damon Knight's "Creating Short Fiction" in an earlier post while I was still reading it and said that I liked it. Well, I finished it and I like it a lot. This is an incredibly useful book on crafting short fiction. I think there is plenty in here for both the novice writer and the been-around-the-desk-a-few-times writer. There is a wonderful section explaining various different viewpoints and the advantages and disadvantages of each (that section alone may be worth the price of the book if you are particularly puzzled or interested in whether to go with a limited omniscient viewpoint, a detached viewpoint or a multiple-character viewpoint). There is also a great section on developing characters and good advice on what to do if your plot fizzles out.
This book does a great job of leading you from initial idea to finished story without being boring along the way. Also included are examples and exercises. I'm glad I read it.