Starters are essential for making beers with an original gravity higher than 1.060 for a 5g batch. A good calculator for deciding if you need a starter and what size starter you need can be found at Jamil Zainasheff's site MrMalty.com. I normally just use the calculator that is built into beer-smith.
After resolving to make a starter should gather your equipment. You'll need a sanitary container, preferably glass (it's harder to scratch so it's less likely that micro scratches will contain bugs, plastic sucks imho). I use an Erlenmeyer Flask made from borosilicate glass so my instructions will be tailored to this vessel; the use of other vessels is possible but you should do your own research into sanitation and procedure.
(Please read more after the break.)
I make my starters using the 1 gram to 10 ml rule, so 2000ml is 200g of DME. I add 200g of DME to my flask and a 1/4 tsp of yeast nutrient. Add to that to about 1800ml of water(you want to leave room for the 125ml of liquid in the pouch) and you're in business.
At this point I drop in my stir bar and swirl the whole thing until it's mostly integrated then toss it on the stir plate for a few minutes. Finally I cover the top with aluminum foil and tightly wrap it around the top portion of the flask.
With the whole thing mixed I take a sauce pan and fill it about half full with water and put the flask in it. I do this to keep direct electric heat off of the flask and to make sure it's heated evenly. Then I bring it to a boil and let it go for 15-30 minutes. This should sanitize the contents of the flask and the inside of the flask itself. After you've cooled the wort to pitch temps, Then you carefully peal back the aluminum foil poor in the contents of your yeast pack, and recover.
You can now let you starter be for 12-24 hours. The Tinfoil will allow air in. Your starter will taste stale so I recommend crash cooling and decanting it after fermentation has stopped.