"Characters serve as receptacles for our own projected feelings and through characters we imaginatively encounter parts of ourselves. Characters teach us to loosen up, not take ourselves so seriously, see other points of view, and have fun. At their best, characters shine a light into otherwise dark areas—places we can’t, or won’t, go on our own. They help us explore our interior world. When I found July Montgomery, he immediately wanted to take me to places I was afraid of going. But his spirit was so courageous and resilient that I was willing to go along."
-- David Rhodes, on his novel Driftless
I recently read Driftless by David Rhodes, a book I highly recommend (some strong language, mostly in one chapter from one character, for those who are sensitive to such things). Page after page had sentences I wish I had written, and each character, even the minor ones, came off the page as unique individuals.
Even if you don't read it, the interview quote at the top of this post is one of the best I've read in a long time about characters and how they relate to the author.