Pull the head/tentacles away from the body, and remove the ink sac as described in this Instructable
and place it in a small ceramic bowl with a tablespoon of water.
Scoop any remaining guts out of the body, and remove the thin plasticy quill. Rinse the body inside and out, then slice into approximately 3/4-1 inch thick rings.
Squeeze behind the head to extrude the beak, and remove it from the center of the tentacles. Cut just below the eyes to free the tentacles, then add them to the bowl with the body rings.
Tentacles are the best part. No, really- they're fantastic.Collect ink from behind the eyes
as well if you don't have very many squid and want to increase your ink yield.