This does seem to be the question that gets asked more often than any other at writers' conferences and conventions, and the one that the guest writers always roll their eyes at. Ideas are around us -- they mark boundaries limited only by our imaginations.
Last weekend I was away, staying in a small country town. Now, as it happens, a friend of mine used to live in this town and told me that the people in it were rather strange. This weekend I saw evidence for myself. We decided to have fish and chips on the Friday night, and walked down to the local fish and chip shop, which had signs up to say it was under new management. On the door was a sign that said they had closed that day (and presumably forever) because of small-minded people who'd spread rumours, and then thanked those who had "given them a go". Ah, the old management, I thought. Only there was a second sign that said something like: "Watch out ya dogs, youll get your own", and it was signed by one of the "new management" people.
The next day I was going into the supermarket when I heard the following conversation:
Woman: "He says I'm a really nasty person."
Man: "You know what you should do? You should abuse him. In public. In front of everyone."
Now, normally, I wouldn't think too much about such a conversation. A wife having had an argument with her husband and confiding in her brother? A woman who's just dumped a boyfriend? (And already that's the writer at work -- speculating on what the story is, what the motivations are.) But in light of the previous day's discovery, this conversation took on more gravitas. Nice town, that. And not just in a sarcastic sense, but in the sense that this will feed my fiction. My stories are set in a fantastical setting, and there are no fish and chip shops per se, but that doesn't mean I won't use this event, change it, shape it to fit the story I'm writing. Here are some pictures of the nearby environs: a waterfall, and scenery on a bushwalk we did on a day that was too hot for walking. Lovely translucent leaves on trees. And all of that is grist for the story crucible too. Such detail can enrich our settings.
And don't forget to look for character moments -- the time your friend looked like she was sucking a lemon when you told her some good news. And why, exactly, did she look like that? Ask yourself -- constantly ask yourself about why people act the way they do. Why did your mother hang up on you the other day? Why did your girlfriend stand you up?
Some years ago I was in a class run by a reasonably well-known writer, and I happened to mention that a friend of mine lived in a front flat, and in the flat behind lived two ex-prison guards, and that these ex-guards were so worried about being recognised that they jumped in their car and drove down their driveway to collect their letters from their letterbox. They wouldn't get out of the car for this, but would lean out, and then reverse back up the driveway and go inside. The teacher said straightaway, "Oh, that's fantastic. I'm going to use that in my next novel." I was a bit miffed, because I thought it was my story, but of course you can't copyright ideas, and I had shared it with her. I don't know whether or not she used it, and I wouldn't feel right about doing this without asking whether the other person intended to use the idea, but legally she did nothing wrong. You can't copyright ideas, and in any case I could always modify it and use it in a different way if I wanted to. But of course my characters don't have cars or letterboxes either.
There's more in the annoying moments of life. Today, at work, I was trying to chase down some forms I needed, and got the ring around -- literally. First, the switchboard sent me somewhere with a press-button menu, and when I selected the most suitable option, I got the switchboard again; then they directed me somewhere else that still wasn't right, and when these new people said they'd put me through to the right department, they put me through to myself. Only I got the answering machine, of course, because I was already using the phone. Moments like that, trimmed back or expanded, can provide comic relief in an otherwise too-serious story. Think about what your story needs, and what you can use to flesh it out. Look for interesting snippets in newspapers -- quite often the Odd Spot can spark ideas, as can strange (and even mundane) article titles.
Keep notes. Use a voice recorder if you don't like to scribble. Keep a dream journal -- something I keep meaning to try except that I hardly ever remember my dreams.
One thing that many writers do is conflate disparate ideas -- it's a great way to come up with something original; after all, we've all heard the chestnut that there's no such thing as a new story. But pulling together two or three ideas and weaving something new out of them can be immensely rewarding and exciting. So don't despair that you don't have any ideas -- they're all around you. You just need to learn to look for them!