The ID Mike basically helps to direct your blockers to a central location. The game by default has a defensive player that is ID'd, as far as I can conclude.
One way I use the ID Mike system is to ID the closest defender to a pulling guard. This technique appears to assist in preventing fast backside pressure on my RB so I have a bit more time to let the blockers ahead of my runner set up, and my RB to find a hole. (I control my HB)
Setting the ID on a blitzing defender will give a better chance of slowing the blitz.
If I have no specific player in mind, to ID, I will pick a defender that is highlighted with a "star" to attempt to take the defense's best player out of the play; or at least slow him up.
If I make a bad Mike ID the results are not necessarily bad. A great play in general will still play great. But if you're using a bad play, a proper Mike ID can give a little more positive result.
I like to do a lot of Power and Inside Zone runs. On Power plays I'll ID either the very outside defender nearest the line, or I'll ID teh defender closest to the pulling guard. This takes a little practice for each play. Usually if the defense is stacked heavily to the run side, you want to ID the mike on that side, otherwise ID the defender closest to the pulling guard spot..