I pick the lines I like first and then the breeder second.
I like dogs who can do what they were bred to do, end of story. To me, herding dogs that can't herd are nothing more then companions. That's why I chose Cardigans over Pems in the first place, that and I don't like a needy-in-your-face kind of dog.
Health testing is important, but the problem with that is that there is no guarentee that just because the parents were health tested the puppies will all be healthy. Certain things you can control and if it is controllable I do expect for the breeder to take into consideration.
For example, while hips are polygenic (meaning many different factors go together to create "good" hips) bad hips breed bad hips down the line. If a dog has an OFA fair, I wouldn't breed to it unless it had tight hips. I don't mind a dog with looser hips if the structures themselves are good. I would also want hips, elbows and spine done as well.
Problems like DM, IVDD, PRA can be bred out, and I would fully expect those tests to be done if it is not known by pedigree the status of the individual being bred.
Autoimmune issues like hemolytic anemia, Addisons disease, Von Willebrand's, Mega Esophagus, Allergies, Thyroid issues, Alopecia, etc should also be taken into consideration. Even if it's a sibling of a dog with those characteristics that you're breeding to, you really need to be careful. Those are other things I would and have researched very carefully.
Midline issues, liver shunts, etc are something else I would want to know about. Again, even if the dog has a sibling who had a hernia that closed or a mild cleft palate that took care of itself or a shark bite etc those are all midline problems and they can be carried down the line quite easily.
If a breeder is honest with me about those things and I KNOW what I'm getting into, then they must also have versatile dogs. I fully expect for them to have their dogs in herding and conformation, and I expect no less of myself. Obedience, agility, Rally-O, Flyball, DiscDog are all great, but I'd rather have a breeder who participates in field trials, herding, or Earth Dog.
I would also expect the breeder to take the dog back at any time if I cannot care for it, and also to provide a two year health guarentee that includes reimbursing me for the cost of the dog should a genetic issue crop up that is expensive to fix.