There are some classess and the need of presenting proof of being Catholic in the first place.
In the old days the bond between parents and godparents was considered more sacred than that between siblings. A child had to treat godparents with as much respect - if not more - than he did his own parents. Also godparents were supposed to take the child under their wing should the parents die.
The tradition was to choose either someone that was very close to the parents, someone highly respected in their community, or someone rich (and probably respected too). That would give the child a headstart later in life should they need recommendations, or even a job (that's how Trujillo ended up being the godfather of countless kids here).
Obviously things have changed. Right now it's a bit more than a formality and gifts, no necessarily luxurious, are expected at Christmas.