My example of a good readme: (toot my own horn!)
http://www.romhacking.net/translations/snes/patches/690readme.txtYou should include:
1. Patch Version and Date (inlcuding version change history if more than one.).
2. All the items Deathlike 2 mentioned!
3. Distribution and Licensing Information. Make your wishes clear so there's no assumptions or guesswork and clarify you don't claim ownership to any copyrighted material from the game publishers. It's also a good time to give them credit.
4. Credits. Surely you want to give any other hard working individuals that helped out the credit they deserve.
5. Outline what your patch is supposed to do and any known issues!!
Optional:
1. Deathlike2 pretty much got it there. Basically any other additional information you want to include about the project, game, hacking work, team members etc.. Or any other information you think is important for the user's experience.
2. These days it's very helpful to have your readme line wrapped for readability in web browsers. Reading readme files that scroll horizontally sucks.
It's actually quite a job to write a good comprehensive readme. I know mine, such as the one I linked above, have taken me several hours to write up and get in final form. And there are some people who write better or more comprehensive readmes than I do.
I consider a readme as a part of the project. As much care should go into it as the rest of the project. It represents you and your project. It is meant to be an informative piece of information for the end user to have the best possible experience. It also helps eliminate countless repeat questions, help requests, or bug reports.
Sometimes, the benefits and reasons for writing a good readme are not always clear until you've released something. I must admit to not having as comprehensive of a readme until later on in my hacking umm.. 'career'. I failed to see the value until later on.
P.S. On a side note, it also makes it easier for sites such as RHDN to know what the heck your patch is supposed to be for, what it does, and other help in cataloging it properly and writing an adequate description!