I'll say right off that I don't know how to create a great book cover. What I want to explore in this post is my thinking behind the evolving cover for my first novel, Of Fish and Swimming Swords.
When self-publishing, you have to provide covers for each of the formats you're publishing. If an electronic edition, you'll need the equivalent of a front cover. If going with a POD edition, you'll need the front, spine, and back of the cover. Usually, you want the electronic cover to be a version of the POD cover. For my covers, I'm using Inkscape for vector drawing and the GIMP for final composition and effects. Both are free, open source applications that have versions for Microsoft Windows, OS X, and most UNIX/Linux distributions.