Hopefully in Chapter 1 you built up a basic idea of what your character's personality would be like, and used that idea to choose his background, stats, abilities, weaknesses, and aptitudes. It is likely that the process of making all these choices caused you to change and refine your idea as you went along. At this point, you should work out the final details and write them down.
We wait until now for this step because all the previous steps have helped you get a clearer idea of what type of character, what type of person, you have. Now you can ponder, "How would a person think if he had the ability to _____? How would she react to _______ if she were raised like this, and knew _____?..."
In any good book or movie, it is this step that really makes the story good. Without it, all we have is an overgrown board or video game; and, unfortunately, all too many books and movies are like this. I hope that, if you are really interested in roleplaying, it is because board games and video games, and similar pursuits, while possibly among your favorite things to do, are not enough. If so, this is the step where you find that extra part.
Try -- very hard, as it is very difficult to do -- to imagine how you would have turned out if you were under the circumstances your character was. This will give you most of your personality, if you do it thoroughly enough. Also remember that there may be quirks or twists, likes and habits, that have no dramatic, obvious origin in your character's life. While it is indescribably important to be able to explain why your character is the way he is, there are still little details whose explanation is too trivial to mention. These probably just developed over time. They help make your larger-than-life hero a little more human.
At this point, you should complete your background story. Write it out, and do not be afraid to spend a page or two, if time allows; the extra material will be useful later. Present it to your GM for possible amendments or clarifications; thereafter, keep it with your character. (You might want to write the story and personality description on the back of one of your character sheets, to minimize paper clutter.)
To round your character out, you need to be able to picture him in your mind. If you have the artistic gift, you may want to make a sketch of your character; this is by far the best way to describe his appearance. However, many of us have far too high an AV in ARTS, so to speak, so we must rely on written description.
Even so, we should take a lesson from the artists among us and build a picture from the basics to the details. First, we must determine height, weight, and basic bodily build, as these form the framework.
You should feel free to assign these attributes as you wish, and be as descriptive as you like. For instance, a description like "5'6", 125#" could be transformed to "moderate height (5'6); lithe but firmly muscled, not stocky, looks lighter than she is, 125#; stands tall and unslouching, so appears taller; angular body structure with wide variation between chest, waist, and hips." To do this, start with the height and weight, then add details: stockiness, posture, curves, angularity, etc.
It is, of course, important to know how old your character is, something you probably decided when creating his background story. However, you will also want to decide how old she appears; this could include both physical and mental factors: "24, has body of an 18-year-old but lines in face show age and maturity; voice seems older, as does manner of speaking; sounds 30 or older on the phone."
Another thing to consider is the coloration of your character's hair, eyes, and skin. While doing this, you may want to decide some other details about his hair: curliness, bounciness, erraticness, wiriness, frizziness, sparsity, etc. Males may be bearded, mustached, or clean-shaven, and have body hair in any quantity. Eyebrows, beard, and body hair may not be the same shade as head-hair. Baldness or receding hairline may be striking. Hair color may be streaked, obviously dyed or bleached, or otherwise artificially altered. Makeup, perfume, and cologne may be important, if not overriding, concerns.
There are many other small details that may be worth the investment of time to create. You should choose your character's handedness (but note Ambidexterity is an ability). Scars, moles, nose shape, depth of eyes, pointiness of ears, dimples, foot size, ungainliness, complexion, tattoos, jewelry, mode of dress, posture, walking style, mannerisms (e.g., scratching at head constantly, clasping hands shyly over skirts), and other details can make a huge difference in humanizing your character.