My process is a little detailed, and requires several tools, but I've been very satisfied with the results.
First, I use a good 3D Terrain generator and tell it to generate an early-life-stage planet-sized map. I may render a few different ones until I see just what i'm looking for.
Then, I'll grab some of the open source genetic DNA mappers that are out there, and I work up a "first level" biology, I call it. microbes, ameobas, whatever. I try to stay small, with the first complex life forms being more plantish than animalish.
At this point, I rerender the terrain mapper with an erosion/platelet-shift mod I found. This helps show the tectonic redistribution of matter, may cause some extinction level events. It's all very exciting.
Now I'm ready for level two life. There's a cool tool called 'iVolution' that will take my microbe and early-generation dna files, and evolve them through billions of mutations in a pretty quick amount of time. It's only available on iPhone for now, which is a pain, but it does the trick fantastically, so it's worth the annoyance factor. This gives me my first "animals" -- usually they look like snails, or little fish, sometimes by this point I have land-based plants, which are getting much more complex, and early insects.
The USGS has some fantastic climate modelers, and I have one of them I use now for modelling climate. most of teh data comes right from the planetary file, so I only have to fudge a number here and there to really get the results I'm looking for. I can model rain and wind patterns, days of sun, UV exposure, everything.
Time for level 3 life. This one's trickier. I have to decide what types of life will initially succeed, and then I make them more complex, and larger. The species-war-2000 simulator takes care of the iterations for me, which sure helps.
This is a good time for a universal cataclysmic event. With that utlility AutoDesk put out a few years ago that simulates asteroid collisions, I can similate a meteor hitting my planet. This causes some plate shifts, usually creates more ocean space, and sometimes kills off a ton of lifeforms.
At this point, I'm usually ready to introduce sentient species into my world.
I try to establish 2-3 base races, and let them evolve into one or more subspecies of each other. Sometimes I'll have as many as 16 races, but most of my simulations show more than half of them being eliminated before they can even establish a stone age presence, which is a pain, because without any archaeological presence, there's no alien/monster artifacts for the surviving races to seek.
I use microsoft's empire generator to iterate each of the races through 10,000 years (or so) of history -- I've got my own name templates, which you totally need with that tool, as you know. this does a great job of tracking wars, bloodlines, feuds, just some wonderful things you can do with it.
I'll use a random calamity generator during the iteration to decide which race will randomly be snuffed out, and when. This race's buildings and effects become ruins and artifacts for characters from the other races to plunder.
This entire process takes me maybe 2-3 years to go all the way through, but I can't tell you how satisfying it is to me to have the finished product.
Right now I'm researching a tool that will randomly generate my characters for me that is plug-and-playable with the data file I've established.
I've done like, 8 of these worlds, and someday I'm going to write a novel about one of them. I think it'll be awesome.