There are really two main ways in which other works of art inspire me. This is true for most art forms, from visual art to music, but mainly I'm talking about other story-driven art such as books and movies. When I read a book or watch a film, some part of my brain is always fascinated with the storytelling techniques while the other parts are engaged in the process of losing myself in the fiction. On occasion, I walk away at the end, scrambling for a notebook to jot down all the thoughts I have -- inspiration has struck.
The most obvious type of inspiration comes in the form of Oh My God! I wish I could do something that great! I seem to get this feeling every time I see a Miyazaki movie (My Neighbor Totoro, Spirited Away, etc.) or read one of Alain Robbe-Grillet's novels or contemplate Henry Darger's Realms of the Unreal.
I find this kind of inspiration to be creatively dangerous. Being so enamored with something as you conceive and work on a project never really works out for me. You spend all of this energy comparing. This is one of the reasons that I have a rule about not reading or watching anything too similar in premise to what I'm currently working on, while I'm developing it. When these great works have time to fester and stew in the imagination, that's when I get real inspiration from them.
Lately however, I've been more inspired by works that I find to be far short of perfect. This isn't a new source of inspiration for me. I'm often driven to write out of sheer disappointment or frustration with something that I think fails on some level. My mind begins to weave a new story to meet my expectations. In some ways, I'm more grateful for these intriguing flawed works than I am for the monuments of perfection that daunt me. However, we all need a goal to strive toward and that's what they provide me.