There are a number of improvements you can make to the standard 404 page.
These vary in complexity, server and programmer overhead, and
effectiveness. The most basic so basic that no site should be without it
is to replace the generic 404 page with one that has your site's logo
and design scheme, and a link to the home page, if not a full-blown
navigation bar. It should also express clearly what has gone wrong, and
what the hapless user can do about it, something that the standard 404 page
does very badly.
An additional nicety that can be added to this kind of standard page is a
link to return the user to where she came from, easily implemented in
This can be expanded with links to a site map or other important parts of
the site. A mailto link or form to notify the Webmaster of the problem can
also be a helpful addition.
If you feel the need to move beyond the basics, there are a number of
significant improvements you can make. Adding a search box to your 404 page
can be dramatically helpful to the user, and redirect a lot of traffic that
would otherwise be lost. If your site already has search functionality, it
is of course trivially easy to add a box to 404.html. If not, you can get
good old Google to do
the job for you.
If your site has one basic functionality, like a dictionary lookup or
package tracking, you might want to put an input box for that function
right on the 404 page.