Under no circumstances should you ever, ever, every warm a baby bottle in the microwave! Never do it! All the instructions that come with baby bottles state this, but it bears repeating. Just don't do it! Do it this way instead.
Using things you've already got (you did remember to buy baby bottles before you had your baby, right?) you can safely warm up a bottle. You'll never over-heat it, it's easy to do, and most likely, it's free!
Thanks go to my mother-in-law, who passed on how she warmed bottles when my wife was a baby. Still works today!
Step 1: Gear Up
Follow manufacturer's instructions, and mix it up with sterilized water. We boil water in a kettle for a few minutes, then pour it into a sterilized, pre-heated glass jar, and allow to cool before making bottles.
After the bottle is made, keep it in the fridge until you need it.
Now, the key to this method is an appropriately-sized vessel. We use an old, beat-up (but clean) measuring cup. It's about twice the capacity of the baby bottle (this ends up being important later on). Find yourself a vessel you're not using often that will accommodate the baby bottle, leaving about a 1 inch gap around the sides.
Step 2: Heat Up
While it's heating, place the bottle inside the measuring cup. If you move really slowly, the water should be hot by the time you've done this.
Now, fill the measuring cup with the hot water until it rises above the level of the formula in the bottle. I do it until it reaches the "shoulder" of the bottle, but when we had bottles with less formula in them (3 ounces at once) I used less. Feel free to experiment, and use your best judgment about how much water to use.
The really nice thing about this method is that your hot water is always the same temperature (at least, if you didn't just take a 45 minute shower, it is). Heating the water in the microwave gets uneven results, and could potentially explode - remember that episode of mythbusters? Although it's unlikely to happen at home, you're probably holding a baby, so is it really worth it?
Step 3: Now Just Give It a Minute...
For me, it usually takes about 2 minutes to reach eating temperature, and it will stay warm for up to 20. As it's warming, I usually take this opportunity to change a quick diaper! If there's a lot of lung-exercise happening, a little song-and-dance routine works for us, but YMMV.
It can't possibly overheat, because the measuring cup isn't big enough to hold enough water to overheat the bottle. The outside of the bottle is where all the heat-transfer is happening (between water and bottle), so it's a good indicator of the absolute highest temperature that the bottle could possibly be (although it could be cooler). Your hot water heater has a thermostat that ensures consistent temperatures. It's also simple enough that I don't mess it up in the middle of the night.
Also, it was free! Take that, companies who I've helped make rich!
Before giving the bottle to your baby, test it by dropping a few drops of formula on the inside of your wrist. If you can't feel it, that means it's just right.