The Purdue OWL says, "....depending on the purpose of your bibliography, some annotations may summarize, some may assess or evaluate a source, and some may reflect on the source’s possible uses for the project at hand. Some annotations may address all three of these steps. Consider the purpose of your annotated bibliography and/or your instructor’s directions when deciding how much information to include in your annotations."
In short, an annotation should be a section under your citation in a bibliography that is somewhere between two sentences and three paragraphs in length. It includes the scope of the resource (how long, who is it meant for, are there pictures, charts, data?), the general reading level or audience, and perhaps some summary. It should also include some sort of critique from you: was it helpful? Was it lacking something? Would you recommend it for "x" audience?
See this example from the Purdue OWL:
Lamott, Anne. Bird by Bird: Some Instructions on Writing and Life. Anchor Books, 1995.
Use Cornell University Library's Annotated Bibliography Guide to help you create your annotated bibliography.
Here are some key ideas to keep in mind:
Each annotation should analyze and evaluate, not just summarize, the resource you read.
Annotations should reflect your own experience with a source – don’t rely on reviews or summaries.
Your annotations should address such areas as:
Ideally, you should aim to cover at least a couple of these points and have ~150 words in each annotation.
Make sure that your bibliography is in MLA style. This means that
Other useful resources include: the Purdue Online Writing Lab (OWL) and the UNC Writing Center.