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I'll assume this is just for bumming around the city, and not road racing / trail riding.
If so, you want something that you can straddle while keeping both feet flat on the ground. It should almost touch your crotch (not the crotch of your clothing, if you're one of those low-pants wearers).
Adjust the seat height such that your knees come to about 150 degree angle at maximum extension (you don't have to fully extend your leg to pedal, nor does your knee touch your chin at the top).
After adjusting the seat, make sure your handle bars are in a comfortable position for riding, allowing you to keep your head up.
This is a basic guideline. I haven't purchased a non-racing/mountainbike in about 15 years, so I'm just going by what I imagine you'd like it to feel like while riding.
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