Somewhere between undercooked grains and mushy rice is the perfect risotto you're aiming for: plump and al dente in the centre. To cook your risotto correctly, check for that perfect texture by smushing a grain to see its centre.
Whitney Chen, who was in charge of risotto at Thomas Keller's restaurant Per Se, includes this and a ton of other risotto tips at Gilt Taste:
Cooking the rice al dente is the first, biggest step to greatness. Just like pasta, you want the grains to have a slight bite -- you want each grain to have its own identity. The best way to test is to taste it. But if you're unsure, employ the smear test. Take a grain and put it on a smooth surface (like a cutting board or your countertop). Press your finger into the grain and smush it down while dragging your finger across the surface. If it's undercooked, the grain will chunk apart and you'll be able to clearly see the white, raw centre. If it's just right, your smear will start to smooth out, but you'll be still be able to see a little bit of the white, al dente centre of the grain. If it's overcooked, the smear will be totally smooth.
Aim for the risotto to look like the grain in the centre, where you can see a little bit of the white in the middle -- not undercooked like the one at left or completely smooth and overcooked like the one at the right.
Check out the full post for more rockin' risotto tips, like keeping your risotto wet enough that it can gave a "wave" when you shake the pan.