Handouts usually refer to photocopies of text on A4 sheets handed out by the teacher to the class. With the spread of desktop publishing there is virtually no limit to the quality and content of handouts, with possibly the only consideration being a need to be environmentally aware and not waste paper.
For PowerPoint presentations, overhead displays, etc., handouts may consist of the slides in a reduced format (thumbnails), typically of four slides to a page.
Handouts and other supplemental materials can be used for a variety of purposes: to summarize the material presented, to provide background or extra articles related to the topic, or to give instructions for group exercises and activities.
They can be used to cover complex topics in more depth and also to summarize the specifics of each topic presented. Most importantly, they allow students to carry away materials they can refer to at some point in the future to refresh their memory.
It’s a good idea to tell students in advance that you intend to provide them with copies of any overheads you use as this will prevent participants from trying to note down every word, ignoring the live presentation.
If possible, make your handouts memorable with colour, format, fonts, and graphics, etc., but make sure any visual effects clarify or reinforce the material, not distract from it. When in doubt about graphics or special fonts, remember: the simpler, the better.
And don't forget: most people don't have 20/20 vision. Slightly larger than normal print is appreciated by many students.