What do I look for in used records?

Tough question to answer.
Buy what you want to try! Most of the LPs in the thrift shops are not going to be "valuable" except to the buyer.
I have found stuff like STEREO shaded dogs (mono are nice but cheap resells)(the dead wax codes start with 1s, so a 79s is pretty much a later issue) and Merc 90000 series. six eye Columbia or later two eye Columbia (Columbia dead wax stampers start 1A then progress throught the alpha to 1aj etc then 2a... so an early pressing is more desirable, That means even if you have a title, look at more to find an earlier pressing... a GREAT way to spend/waste time)
The other labels matrix numbers are a secret art know only by a small cabal of LP mavens... not me sadly.
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Condition is everything: a scratch makes a LP WORTHLESS. (unless it is a rare and valuable one say a 'Blue Note jazz LP') Dirt is not a problem, except it can hid scratches. A DULL surface usually indicates the LP is very worn, especially if dull more towards the center. (but some labels are pressed with an even but dull finish.)
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A badly worn jacket should NOT be passed up automatically... it can and often does hid a very good condition LP. and conversly, a great jacket may contain a dreadful ruined LP.
Stereo is rare before the mid-60's and any LP from before then will certainly be MONO. Avoid 'electronically rechanneled for stereo" they suck... get the original mono instead.
Never buy any without checking that the label and cover match. And folks DO buy Lps just to get a better cover.
LPs without the barcode on the back are earlier than ones with a barcode... and more collectable.
Remember that scuzzy LP may be the only copy you will ever see, or it may be super common... experience is the teacher.
And pass on those Mitch Miller singfests, so other seachers have something to slog through too!

To add a little bit more to the above posts, the first mass produced stereo recordings were available in the late 1950's. I believe they were predominately classical releases (someone correct me if I'm wrong). The collectors go primarily for the RCA, Mercury, and London records (from this era). As for identifying the stereo versions the RCA's are of the LSC-xxxx series (Living Stereo) and the Mercury's are of the SR90xxx series (Living Presence). I'm not so sure about the London's, I know the early issues are identified by their light blue back (of the jacket), but I don't know if they are all stereo. As for the mono releases, the RCA are identified by LM xxxx and the Mercury are identified by MG09xxx. With respect to the album Wdi found, it is a mono and probably predates the first stereo releases (1957?).

Pmotz...I believe that the first release of a stereo record was a Dukes of Dixieland LP from Audio Fidelity. I don't have that very first issue, but I do have several other Dukes records that they issued in the months following. The audio quality of those first records was better than 99 percent of the LPs that have come out since. Audio Fidelity, before the advent of stereo, had already established themselves as an "audiophile" label (as the name suggests). I don't know if today's Audio Fidelity outfit has any connection with the old one. I have been unimpressed with their recent work.

Eldartford- Thanks for the info, I've seen Audio Fidelity records over the years but never bought/listened to one. Sounds like I'm missing something good!

One more thing: the 'bad' scratches can be nearly invisible in flourescent light. They are thin but deep, like a knife cut, usually the needle causes these. They almost always have a harsh 'tick' sound.
The 'non-scratch scratch' (called 'scuffing')are broad marks from brushing the LP against an object. These marks often make no noise at all. (if you cannot feel it with your finger or fingernail, it will probably play without a ticking noise)
Cleaning is all important. The dirty looking ones often are easier to clean, wash 'em and play! The clean looking ones sometimes have an overdose of dreadful grunge buried in the grooves, that is really hard to get out. they sound terrible until they are properly cleaned. They need to soak! to get that stuff out.