We propose a definition of what should be meant by a {\it proper} action of a locally compact group on a C*-algebra. We show that when the C*-algebra is commutative this definition exactly captures the usual notion of a proper action on a locally compact space. We then discuss how one might define a {\it generalized fixed-point algebra}. The goal is to show that the generalized fixed-point algebra is strongly Morita equivalent to an ideal in the crossed product algebra, as happens in the commutative case. We show that one candidate gives the desired algebra when the C*-algebra is commutative. But very recently Exel has shown that this candidate is too big in general. Finally, we consider in detail the application of these ideas to actions of a locally compact group on the algebra of compact operators (necessarily coming from unitary representations), and show that this gives an attractive view of the subject of square-integrable representations.