One godparent is all that is necessary for baptism. The one godparent must be a practicing Catholic in good standing.
However, a candidate for baptism is permitted to have two godparents, one female and the other male. Also permitted is the participation of one Catholic godparent and one Christian witness. A Christian witness is a baptized Protestant who was never Catholic but who practices his Christian faith. A Christian witness would not have the same obligations as a Catholic godparent in seeing to it that the child is being properly raised Catholic. In the baptismal registry, a Christian witness would be noted as such and not as a godparent.
Christian witnesses have to bring a certificate of their baptism in a Protestant Church. This is done for two reasons: first, to prove that they are baptized, and second, to prove that they were never Catholic. In the former instance, to be a Christian witness it goes without saying that you have to be baptized. In the latter case, a baptized Catholic who is now a professed Protestant is not permitted to be a Christian witness because he has formally renounced the Catholic religion.
At baptism ceremonies, in addition to a godparent, one may have a proxy. A proxy is one who is standing in for the godparent who could not physically be in attendance (for example, someone in the military who is overseas can still be a godparent by use of proxy). A proxy must also have a sponsor certificate to show that she is a baptized, practicing Catholic in good standing with the Church.
Finally, many ethnic cultures in the Catholic Church have the custom of multiple sponsors for baptism. In this case, only two godparents are placed in the baptismal registry. They are the official godparents and have the official obligations as such. The others in attendance may symbolically participate, but they are never admitted into official status as godparents.
It is always important to remember when choosing godparents that you do so in realms of faith and belief, not just because they are blood relations or others that the family wants to honor. Fifty years ago, it may have been easier to select blood relations that were practicing Catholics, but in our increasingly secular society, this is often not the case.
Godparents are entering into a primarily spiritual relationship with the child. It is hoped that by the way they practice their Catholic faith they will influence the child, even if the child lives far away.