A professional portfolio and should focus on one aspect or genre of illustration only. If you have multiple interests or styles then create separate portfolios for each genre. Only put your very best work in a portfolio. 8 - 12 pieces is a good number to aim for. Art directors will remember you by your worst piece in the portfolio. Replace old work with new frequently. If you are just out of school you may need to work on developing enough pieces to fill out your portfolio. Your portfolio should be cohesive in content and style.
Start out with your strongest piece and end with a strong piece. It is better to have a smaller number of great pieces than padding out a portfolio with weak artwork. Include a page or two from your sketchbook. (You ARE keeping a sketchbook, aren't you? If no, then you should be!) Don't make excuses for your work when you are showing it to an art director - let the work speak for itself.
Don't include work that you wouldn't enjoy doing - invariably those will be the kinds of jobs you get! Think about your intended audience - if you are looking into putting together a portfolio for the children's illustration market then leave out the violent fight scenes from your fantasy gaming portfolio. Likewise, don't put cute, fluffy bunnies in pajamas in your portfolio that is aimed at political satire.
I recommend going with a small portfolio - don't waste your time with the 24" x 36" portfolio you have leftover from art school. Make sure it is small enough to be easy to manage and big enough to show your work off well. Don't put original artwork in your portfolio. Make sure your prints or copies show your work in its best light. If your portfolio sleeves are getting scuffed or worn then replace them or get a new portfolio. Whatever you use needs to look professional at all times. Another option for a portfolio is an Ipad or similar tablet. If you have a cover or case make sure it is professional in appearance and keep the screen free of fingerprints and smudges. Edit your electronic portfolio in the same way you would a paper one.
Include some extra copies of your work in your portfolio so you can hand them out as samples. You might also want to include business cards and a list of clients (but only if they are relevant to the particular field you are working in). Make sure your name and contact information are on EVERY piece. If you are including collectible card game artwork don't bother putting the actual cards in your portfolio - they are too small to be effective samples, although you could display the printed card next to a full page print of the artwork.
Avoid gimmicky presentations - you want to present yourself as a professional. The same goes for high-tech presentations unless you have a physical portfolio as a backup! Printing technologies have gotten inexpensive enough that you may be able to afford to have portfolios printed to give away.
Don't do pieces for your portfolio that are what YOU think an art director, publisher or general public is looking for. You need to discover your own strengths and interests which will make your pieces both stronger and more personal. Showing published work isn't necessarily in your best interest if it is weak, it is better to show your strongest work even if it is unpublished.
Group your works in a logical manner - try to group all your vertical pieces together and then your horizontal ones, or print them out so that they all fit in the portfolio without having to turn it constantly to keep the work upright. Your pieces don't need to be matted but they should be neat, clean and fastened so they don't slide around. You could add a subtle color for backgrounds and or borders to tie the pieces together.
If you aren't sure your work is of professional quality then find an illustrator or teacher that can help you pinpoint your weaknesses and strengths. Everyone will have different opinions on which pieces should or shouldn't be included so weigh their input against your own judgement. Publishers and editors don't have the time or interest in encouraging amateurs.
A portfolio should be a living, changing creation that represents you and your work at your current best.