The top 10% of product managers excel at a few of these things. The top 1% excel at most or all of them:

• Think big - A 1% PM's thinking won't be constrained by the resources available to them today or today's market environment. They'll describe large disruptive opportunities, and develop concrete plans for how to take advantage of them.
• Communicate - A 1% PM can make a case that is impossible to refute or ignore. They'll use data appropriately, when available, but they'll also tap into other biases, beliefs, and triggers that can convince the powers that be to part with headcount, money, or other resources and then get out of the way.
• Simplify - A 1% PM knows how to get 80% of the value out of any feature or project with 20% of the effort. They do so repeatedly, launching more and achieving compounding effects for the product or business.
• Prioritize - A 1% PM knows how to sequence projects. They balance quick wins vs. platform investments appropriately. They balance offense and defense projects appropriately. Offense projects are ones that grow the business. Defense projects are ones that protect and remove drag on the business (operations, reducing technical debt, fixing bugs, etc.).
• Forecast and measure - A 1% PM is able to forecast the approximate benefit of a project, and can do so efficiently by applying past experience and leveraging comparable benchmarks. They also measure benefit once projects are launched, and factor those learnings into their future prioritization and forecasts.
• Execute - A 1% PM grinds it out. They do whatever is necessary to ship. They recognize no specific bounds to the scope of their role. As necessary, they recruit, they produce buttons, they do bizdev, they escalate, they tussle with internal counsel, they *.
• Understand technical trade-offs - A 1% PM does not need to have a CS degree. They do need to be able to roughly understand the technical complexity of the features they put on the backlog, without any costing input from devs. They should partner with devs to make the right technical trade-offs (i.e. compromise).
• Understand good design - A 1% PM doesn't have to be a designer, but they should appreciate great design and be able to distinguish it from good design. They should also be able to articulate the difference to their design counterparts, or at least articulate directions to pursue to go from good to great.
• Write effective copy - A 1% PM should be able to write concise copy that gets the job done. They should understand that each additional word they write dilutes the value of the previous ones. They should spend time and energy trying to find the perfect words for key copy (button labels, nav, calls-to-action, etc.), not just words that will suffice.

I'm not sure I've ever met a 1% PM, certainly not one that I identified as such prior to hiring. Instead of trying to hire one, you're better off trying to hire a 10% PM who strives to develop and improve along these dimensions.

They understand their Customers better than anyone else

The top product managers truly understand their customers. Often way better than even their customers understand their own situation. They are not only able to understand requests & requirements but are also able to innovate for their customers and market their creation.

See: https://www.blossom.io/blog/2011...

They are able to communicate what they know to their Product Team

They are efficient communicators. They understand that product teams crave purpose & context to make great trade-offs. They ask "Why, Who cares & So what?" and help everyone in their team to understand.

See: http://37signals.com/svn/posts/3...

They are cross-functional

They are unicorns. They are holistic. They can zoom out & drill down unlike others. They have a strong background in many fields. Design, Marketing, Engineering, Statistics, Sociology, Psychology, History & many others. Always curious and eager to understand & learn more.

See: http://en.wikipedia.org/wiki/Pol...

Here's an extension to Ian McAllister's answer (which, let me add, is fantastic):

• They paint a vision: The best product managers create a big vision-- one that is bigger than just the product itself.  More importantly, they can take a complex vision, simplify it, and communicate it-- making it easy for people to get it, and be a champion for the long and short-term vision.
• They focus: they see and communicate the bigger picture, but they focus on executing the short-term strategy like no one's business. They don't distract.
• They are an expert at human psychology and behavior: the best product managers think about the user in every scenario-- how they would think about x feature, how they would react to y design. They constantly ask: what would [muse/user] do?
• They wear many hats: they can do it all-- gracefully and seamlessly. They can guide the content direction, UI, and development-- while also wearing business development, product marketing, etc hats. They think broad AND narrow-- they understand and communicate how the product vision ties into the company (and beyond) vision. They know enough in all areas to be dangerous, and have their hands in all areas to make the product and team the best it can be.
• They show up as a leader.... every where and in every moment. They make everyone around them better though this leadership. They inspire people around them to think bigger, and push boundaries.
• They are vulnerable: they admit to mistakes, they take responsibility, and they continuously work on themselves/develop through the work.
• They make decisions quickly: they make decisions carefully, yet quickly considering multiple perspectives. They enroll and communicate these decisions effortlessly.
  
• They get related: they build strong relationships with people on the team (and inside, outside, up, down, and across the company) creating space for better communication and trust.
• They tap into intuition: the best product managers understand and seek knowledge (analytics, user behavior/research, others views) to hone their intuition. They create strategy and make decisions listening to their gut.

The top-voted anser by Ian McAllister is great— However, he forgot one really big bullet point:

• Talks to customers - A 1% PM talks to customers all the time, obsesses about them, and doesn't buy into the bullshit that customers "don't know what they want." Customers may not know the ideal solution to their problem, but they are experts in their problem. They can always describe their pain points and they can always react to a proposed solution or prototype. Any PM that leaves the customer out of the equation will never be in the 1% category.

I had originally wrote the following as a comment to Ian McAllister's thoughtful answer, but I think it is really more a direct answer to the question:

Seems to me that ultimately great PMs are those that know what the market wants before the market itself knows and do whatever it takes to get that built.  I don't care how well you match everything on a list of traits of great PMs, but if you end up with something people don't want, you can not be considered a great product manager.

Someone mentioned Steve Jobs is a great PM and I would agree.  However, I don't think Steve Jobs was particularly good at a lot of the items that people have mentioned.  On the other hand, he was amazing at knowing what people would want to buy and maniacal at making that a reality.

Hate to sound harsh, but following a list can make you very good, not great.  Being great isn't about following a bunch of best practices - it is about having the right vision and doing whatever it takes to make that vision real even if means doing things that are against convention or goes against standard practices.

There is no formula for greatness in any field and in fact I would suggest that following guidelines on how product managers should go about their business probably gets in the way of being great.  The ultimate goal of product management is the product, not the process.

The process is important when you don't have an unwavering belief in the correctness of your vision (which applies to most people) as the process is geared toward improving the chances of getting it right.  But, if you know what you want to build is absolutely correct, you are able to ignore the process if it gets in the way.

Frankly, as odd as it sounds, it is too risky to encourage every PM to be great.  It is much safer to encourage them to be very good and follow process.  Few of us have the wherewithal to be great.

If you look at history, great people have much more in common with the colossal failures than with the very good.

High performance product managers ship highly successful products - this is obvious.  The question is - how do they do this? 

How many times have you seen a great technology release which the  company couldn't sell?  Or a great sales force without the products?  Or great products which are not appropriate to a companies clients?  A great product manager makes sure this never happens (or does ever thing they can to prevent this).

The key  is organizational alignment.  Product managers don't build or produce products or services, they rely on other groups to do this.  It is the execution of other groups which the product manager relies - it is the PM's job to coordinate them.  The PM must ensure each team understands what they need to do and when (sales, engineering, biz dev, ops, finance, marketing, etc) AND understand if these groups can and will execute. 

In order to do this, they need several skills/abilities - several mentioned previously:

• Strong communication skills (verbal/written) 
  
• Ability and focus to dive into details in order to assess effort and likelihood of success across teams.
• The ability to build a road map which an organization can align and execute around (visionary road maps which cannot be transformed into a tactic plan are not good product road maps, they are pitch decks)
• The ability to understand the various operating teams and how they work.  This includes motivation, processes, mindset, structure, communication style, culture, skill sets.  The breadth of this understanding is one of the biggest difference between great and average PMs.
  
• Enough technical wherewithal to assess the complexity and core challenges of any engineering requirement.  This is critical for understanding timing/probability of delivery - and when to seek alternatives.
  
• An understanding of their company's business model and the ability to apply this to each operating team - this is critical for prioritization.   
  
• PMs need vision, but this but it is additive to these other skills.  There are tons of people with great ideas, but very few who can get them out the door.
• Structured approach to learning.  Great PMs know how to learn what they need to - they will continually be faced with things they need to learn to be effective.

The top 1% of PM exhibit most or all of these skills.