So, you want to start a LUG? DO IT! Here are some hints that I've picked up in 2 years as President and 1 year as Vice President of the OSU LUG.
Your first task is to evaluate what already exists in your community, to determine whether a LUG is needed.
Current and former local LUGs and friends
Has your campus ever had a LUG? If so, find its web site and mailing list. Use the names, IRC handles, and your Facebook and LinkedIn stalking skills to track down the LUG's former leaders and reach out to them to see whether they'd be willing to advise and mentor you in resurrecting their old group.
Other people who might know about old LUGs include CS faculty, academic advisors (if they've worked at the university for longer than you've been there), and the full-time network services staff who run mailing lists and student organization web hosting.
If you can get ahold of an old LUG's mailing list, it's a valuable tool for recruiting alumni who are pursuing Linux-related jobs in the area to speak at meetings or help you find speakers.
Make friends with these people -- they're one of your best resources for advice on how student groups work at your particular university.
Student-org support on your campus
Larger universities often have an association for student clubs. Ask the leaders of an existing club who to talk to about becoming an official student organization. The office where you sign up for that status often has a variety of resources for leadership development, club recruitment, industry relationships, and other advice specific to your university.
Do students at your university have access to a shell server where they can run persistent IRC or just mess around with Linux? If you don't know, talk to the Computer Science department and university network administrators or helpdesk to find out.
If a shell server isn't provided by your university, consider setting one up for LUG members. IRC is a critical tool for LUG engagement, and students need access to somewhere they can set up a persistent session.
Are there any open-source-related tech conferences in your city or state? Talk to the conference organizers about getting free or discounted admission to at least the exhibit hall. While conference talks are cool, you can often watch them online later. The exhibit hall is where you network with local businesses, ask them nicely to donate promotional items with their company's branding which your group can in turn distribute to students as free handouts or prizes in coding competitions, and make connections with possible speakers for your meetings.
Compile a list of all the companies in your city who use Linux or other Open Source software in any capacity. Connect with them to explain how the skills that students learn by participating in a LUG will benefit their businesses, and ask them what open source-related skills they'd like to see in prospective new employees. Use this feedback to make your meetings and content more useful to the students who get involved.
Think outside the box. For instance, a LUG in Detroit won't be near many tech startups, but they could research the places where Linux is used in the automotive manufacturing industry, such as production line robots and test equipment. By connecting with a company who hires technicians to develop and maintain those embedded systems, they can not only improve their group's usefulness to students by preparing them for likely careers, but possibly score some neat hardware to practice programming on.
Does your school have an ACM chapter or Ubuntu LoCo group, or an active branch of the Mozilla ambassador program? Talk to them! Depending on your user base, consider starting one of these groups in conjunction with the LUG, because support and mentorship from the national organization will benefit the LUG as well as the more specialized group's chapter.