I am very new to blender, and I thought that now might be a good time to try some character modeling. I got a decent rough shape easily, but I have no idea what to do to my model to improve it. My question is, how should I go about turning something like this :
Any tips for improving modeling would be greatly appreciated.
A fine tutorial, or I should say an excellent presentation of blender by masterxeon.
You may find it a little advanced for you, however your request is advanced anyway.
Depending on your knowledge, and I know nothing of what you can and can’t do both in blender and artistically. Before and dressing up your model. I would have a good (not perfect) understanding of the human anatomy. As boring as it sounds. But that will be half your battle. Knowing proportions and muscle structure is the key to making your model looking like picture number 2. But as I say, you may already know this, and simply asking where to go regarding the blender program. So sorry if I sounded condescending. 
Great tips above. Knowledge of human form is essential. And not boring at all, once you delve into it. There is some fantastic work being done replicating classical works of sculpture in blender.
And like chamberezz said, knowledge of human anatomy will translate to really outstanding, believable character models.
Thanks for the tips above guys. I actually happen to have a book on human anatomy as it relates to digital art, so I guess it might be time to actually read the book with the intention of applying it to my attempts at modeling.
Edit: As far as modifiers go, should I take the time to learn how to use all of them?. I feel like some of the modifiers would help to increase my productivity, and I only really know how to use a few of them.
There are many good resources on learning to model characters. I recommend Blenderella, Introduction to Character Modeling in Blender, Introducing Character Animation with Blender (which provides a tutorial on modeling the character before it talks about rigging and animation), and Character Development in Blender 2.5. Note, none of these are free. You can find free resources by googling around, but the quality varies.
Welcome to BlenderArtists 
Another thing about human anatomy. Depending on where you get you literature from regard to learning it. Don’t be bogged down over names and where every tendon needs to be. For now anyway. Just get to know the form, proportion and muscle locations. It’s easy to want to over load your mind with information just to get started, but take your time
Oh and I’d like to say and point out only because I’m anal and it’s a something I see all the time but, The six pack starts under the pecks and ends above the belly button…. Doesn’t start below the ribs like lots of people draw……………………Phew, I feel better now
Regards to blender and it’s modifiers. Yeah get to know them. You might not need to know every one. But understanding is the key to most things the above tutorials are great too.
The most interesting about anatomy is the blocking out.
We aren’t doctors, we are artists.
http://www.anatomy4sculptors.com/?menu=10&sub=23#body
