Adding chords to melodies

I started this thread to answer Marion Seaman 's question:

I've taught myself to play the MD (after a fashion....) and have just sussed out how to transpose a melody from one key to another. I changed a song from Bbmaj to D as I dont know how to play my MD in Bbmaj. now I want to be able to put the chord 'letters' above the line so I can play in chords and not just single notes and or drones. Does anyone in this group havea simple method for putting chords into a melody for a simpleton (me)? thanks in advance.

To me, the easiest way to start going about adding chords to a melody (especially if you don't have a recording to listen to as a reference) is to figure out what notes (or fret #s) are in each chord you'll potentially be using. Then, whenever the melody lands on one of those notes (especially for a couple of beats or on strong, accented beats), it's probably the chord that goes with that note. Let me show you what I mean (this is for melody on a D string).

D chord- notes are D (0), F# (2), A (4)

G chord- notes are G (3), B (5), D (0)

A chord- notes are A (4), C# (6 1/2), E (1)

These are the 3 most common chords in the key of "D". So, the melody probably starts on D (0); the chord is D. Then, say it goes to G (3) and B (5) for a measure; the chord is G. Then, say it goes down to E (1) and lands there for three beats; the chord is A. This same method works well for working with chord substitutions if you want to put in non-traditonal chords that will still sound good.

How does everyone else do this?