(These instructions were proposed by Basil Pennington, and I adapted them from a Wikipedia entry. It's not exactly how I was taught, but these instructions offer a decidedly Christian method of practicing this type of prayer. Non-Christians may adapt by replacing any Christian terms with simply 'God'.)
1. Sit comfortably with your eyes closed, relax, and quiet yourself. Ask God to be with you and to help you to open yourself completely to him.
2. Seek a sacred word that best supports your sincere intention to be in the Lord's presence and open to his divine action within you (i.e. "Jesus," "Lord," "God," "Savior," "Abba," "Divine," "Shalom," "Spirit," "Love," etc.).
3. Let that word be gently present in your mind, a point of focus for your thinking. This takes time, practice, discipline, and God's grace. :-)
4. Whenever you become aware of anything (thoughts, feelings, perceptions, images, associations, etc.), simply return to your sacred word, your mental anchor, and with God as your spiritual anchor. Ideally, you will reach the point where you are not engaged in your thoughts, only engaged with God's presence. Keep practicing! As you make concentrated efforts to learn to be in the spirit, to learn how it "feels", the easier it gets to recognize him in the busy moments of daily life.
