If you don't feel like reading, you can watch this video. Also, I played a little demonstration in the video.
Step 1: Materials
Small Project Box
Soldering Iron (optional)
A note about the button. I got mine at RadioShack. MAKE SURE that the button is usually open. That means that when you aren't pressing it, it's off. If on the back of the packaging the button came in it says "Usually Closed" DO NOT buy that button!
Step 2: Attach Wires to Guitar Cable
Step 3: Put the Cable Back Together
Step 4: Make the Box
Step 5: Attach It All to Your Guitar!
Try moving it to different places! Putting it in the lower left makes it easy to hit with your arm!
If you really like the killswitch and think you're ready to actually install one, check out this Instructable by pandaman0529!