Step 1: Hollowing out the potato
To cut the lid, start off by lightly scoring all the way around other end, with the kitchen knife. This will give you a nice reference line to follow.
Insert the blade of the knife at a sharp angle. You will be cutting a cone shape, so the tip of the blade should go as far as the center of the potato. (The cone shape is to make it easier to sit back on top when you are done.) Cut all the way around, and remove the end.
Using the melon baller, scoop out as much of the potato you can, without cutting through the sides. You should be able to get the walls to about 1/8" - 1/4" thick.
Do the same for the lid, but also add a vent hole in the top with your knife. This will allow air to flow, keeping the candle from snuffing out, but also so that your potato does not prematurely roast from the inside out!