The Cat 5 standard has been updated to the Cat 5e standard. However, the crimping configuration remains the same, so these instructions will work for either standard.
There are some excellent additional tips and elaborations on procedure in the comments, so I'd recommend that you read those too as you go through these steps.
Step 1: Materials
~ Cat 5 cable
~ 8P8C (8 pin 8 contact) connectors - (these are also referred to as "RJ45" connectors)
~ A modular connector crimping tool
~ Wire cutters/strippers (may not be needed depending on crimping tool)
Step 2: Prepare Wire
As mentioned by cwolsey in the comments, you may want to strip off more than 1/2 inch, arrange the wires (which you will learn to do in the next step), and then cut them down to length to make sure they're straight on the end.
Step 3: Put the Strands in Order
*Unless one is trying to create a crossover cable. You can read about them here: http://en.wikipedia.org/wiki/Crossover_cable