Step 1: Collect your gear
2 Tbsp dry milk
3 cups milk (2% or skim)
2-3 Tbsp unpasturized plain yogurt
Vanilla yogurt can be used instead of plain yogurt too. The added yogurt must contain a live culture; pasturized yogurt has been heated to kill both pathogenic and beneficial bacteria. If fruit yogurts are used as the source of this culture, the bacteria usually aren't as healthy.
The smallest portion of yogurt I can find comes in 6 oz. and milk comes in half gallons. I personally like this yogurt, though the missus won't eat it--god bless her--so I'm scaling up the quantities accordingly:
1/3 cup dry milk
1/2 gallon 2% milk
6 oz. unpasturized plain yogurt
Those are more appealing quantities anyway.