The first step is to get the bike to fit right. Next you need to pedal effectively, applying force in perfect circles. Then you need to look at subtle body position issues as you move down the road.

One common form faux pas is when the knees come away from top tube at the top of your pedal stroke. This not only looks sloppy, it increases aerodynamic drag. As you pedal your knees should follow a perfect up and down alignment just a couple inches from the top tube. It's natural for knees to come out for athletes with big thighs as they rub on side of seat. It also can be caused by lack of flexibility through outer hips and ITB (iliotibial band) area pulling knees out. The solution is to be aware of it and correct for as long as it takes to become natural. Core work and stretching can help flexibility.

Another common flaw is elbows out. On a bike with drop bars, or holding bullhorn style bars this is can be an issue. When you're on aerobars it's not a problem as your elbow position is set by the arm rests. Good form is elbows bent slightly to help absorb road shock, and angled back, not out.

Consider what the wind 'sees' with knees and elbows out—it's a drag :).

Next look for excess movement through your hips and upper body. As you pedal your hips shouldn't rock on the saddle. This could be caused by a seat too high, and saddle sores could be a result. Your upper body should not move either vertically, or latterally as you pedal. Your lower body should be doing all the work with upper body calm and relaxed. The exception is when you stand, getting off the saddle for more power. Even then it should be your bike that moves side-to-side, not your body.

While standing on the pedals you can generate more power as needed for acceleration out of turns, or to get over short steep, climbs without losing momentum. Note that you should never be standing for more than about 30-seconds as additional oxygen demands will take you into anaerobic (oxygen debt) territory quickly.

When you stand the bike should rock side-to-side slightly as this helps you create more leverage and down force more in-line through crank offset directly above the point where your tires contact on the pavement. Be aware that it's the bike that rocks, not your body. Picture yourself form a front view; the bike tips side-to-side making a V movement while your body stays straight over it. The leg that's coming back up to top of pedal stroke should be pulling up like you're doing a hamstring curl. Athletes who spend a lot of time riding indoors on stationary bikes have a hard time letting the bike rock, and this is unfortunate.

Another consideration as you stand on the pedals is vertical motion of your hips and upper body. Your body should not follow your leg down. In other words, as you stand on the pedals your hips should stay at exactly the same level as all the movement comes from the legs while hips are a steady platform just as they are when seated. The only difference is that your bike can rock side-to-side as body stays steady.