Keep it proportional.
I haven't discovered a perfect ratio for pounds of steeping grains to steeping water volume, but I have learned to be wary of using more than a few pounds in just a couple gallon steep.
Previously, I used a grain bag with 2-5 lbs of specialty grains, depending on the recipe, in a 8 qt steep.
Recently, though, I've started adding the milled grains directly to the water, without a bag. After steeping them for ~30 minutes, I use a second pot/kettle and conical colander with some cheese cloth to filter out the grains.
After transferring the wort to the second pot (where I will add the extract, hops, etc. for the full boil), I use a couple quarts of hot water to sparge the specialty grains (still in the colander).
I really enjoy the newer process, because I feel like my grains get better exposure and better add to the flavor profile.