This Instructable will take you step-by-step through the process of making a BioDiesel processor. This type of Processor is called an appleseed processor. It uses an old (or new if you feel like dropping the money) water heater. The amount of fuel you can make will depend on the size tank you use. My first prototype uses a 10 gallon tank. Not too efficient if you plan on making large quantities, but great for figuring things out.
Before you do this project you should research the process and dangers involved in producing biodiesel at home.
Before you run out and buy $100+ worth of plumbing materials, I should say this: As biodiesel becomes more and more popular the resources available become more and more scarce, and people are starting to charge for things that used to be free, specifically Waste Vegetable Oil (WVO). I would suggest securing a source for WVO before you embark on this project.
There are many unspoken rules about gathering WVO from businesses, and I can talk about those in another instructable. For now just know that you CANNOT just take oil, for this you can get arrested and tried. You also need to be consistent (If you say you'll be there every Tuesday to pick up someone's oil and you show up on Wednesday half the time people will often give your oil to other people).
My instructable on how to use this processor can be found here.