Some of the most memorable characters from a campaign can be those developed by both the DM and the player. I remember one character I had created for the game I was running. She was a young girl named Penny, a stick-thin, blonde waif who was on the run from an evil cult in the city where the party was operating. She had a tragic backstory of abuse and neglect, and the reason why she turned to this cult was because of its emphasis on darkness and loss (Shar, for those familiar with the Forgotten Realms). However, after witnessing one ritual human sacrifice, she grew horrified and fled.
The agents of the evil cult were attempting to find her, and the party's role was to protect her. Now, the plan was to have this character get into the hearts of my players and become a beloved and trusted, adopted daughter of the group, only to have her brutally murdered by the evil cultists while the players were away.
This plan backfired terribly
The party proved to be entirely too successful at protecting her, and when they completed a side adventure which led to them gaining ownership of a small tavern in the wealthiest part of town, they turned the tavern over to Penny - and even repaired the two magical constructs that had been programmed to guard the tavern and its legitimate owner. (The players had to defeat them earlier, but given their wealth and connections, I ruled that such repairs were, indeed, possible.) So the evil cultists wouldn't have had a chance at all at slaughtering poor little Penny.
Eventually, she grew her financial and espionage contacts to such an extent (including offering a haven to some neutral dopplegangers operating in the city) that she effectively became the spymaster for the city. She became a significant source of information (e.g. adventure hooks) for my players, as well as a decent fence for some of the loot they obtained.
Waif girl done good!