I agree with the above about never haggling in inappropriate settings like restaurants, it's just obnoxious. However, in a market setting, especially abroad, haggling is key and a lot of fun if you get into it.

It was mentioned in the post, but I'd like to emphasize that walking away can be one of the haggler's best tools. I spent the summer in Peru and visited several markets and the story was usually predictable: the vendor prices above what they actually want hoping to get lucky with someone to take the price at face value, you (the buyer) walk up and take a time to examine everything and find something interesting, you suggest that is actually under what you intend to pay but that is not unreasonable, haggle back and forward, and then if the vendor doesn't go down all the way ...you thank them and walk away. WITHOUT FAIL you always hear "Amigo, Senor" and different requests to come back which usually involves them finally agreeing to your price.

Now this doesn't always work, and many suggest that it's wrong to try and lower the price on goods sold by people who in many cases are poorer that you, but it's all about the process and actually interacting with the vendor. Typically there is an appreciation for someone who understands what a good buy is and regardless I always enjoyed the interaction because it was never just about getting something but also getting to know the artisan who put their time into making the object.