Watch the Positioning Left-Hand Wrist online guitar lesson by Bruce Arnold from Guitar Physiology Survival Guide
Another very common bad habit students have is making their wrist bend around the neck. The more your wrist is bent the harder it is for your fingers to get blood and the harder it is for your fingers to move. It is also one of the major causes of tendonitis in the wrist and upper part of the hand. Keeping your wrist within 10 degrees of straight will greatly help your playing.
You also need to keep your hand from moving too much from side to side. This movement can cause carpal tunnel syndrome and can have devastating, prolonged negative effects on your wrist. Do not reach for notes by moving your wrist! This is one of the worst things you can do.