I've just been reading some great posts on composting at Gardening Anywhere, and thought they were worth pointing others toward.
Composting always seems intimidating to newcomers to the idea, at least it was for me, but once I got going there was no turning back. We have two bins down by our garden. One is the one in use (where we empty the compost bucket under our counter every day or so), and the other is the one settling and manufacturing the tasty treats my 2008 garden will delight in so very much. We throw in all kitchen waste with the exception of meat and dairy stuff. Tea bags, coffee grounds and filters, egg shells, tofu that's gone bad, etc., all lands there. If the chickens don't eat it first (hard to tell our girls no when they look so picturesque on top of the pile and when I know their leavings are as good as gold, too), it breaks down with the leaves and grass clippings I plopped there over the summer and fall.
Ours are built out of old wood palettes - one on the back and two for sides - with boards that we attach to the front to hold things in as the pile grows. We don't do anything fancy except rotate the piles in the spring, and I put in a perennial bed on the side closest to the garden. Native plants - common milkweed, yarrow, blanket flower, and butterfly weed - should keep the beneficials happy for the season.
I wouldn't trade our compost bins and the goodies they produce for anything. Chemicals - fertilizers, herbicides, and pesticides - negatively impact my garden, soil, and water not to mention the beneficial critters I count on to help my tomatoes grow and my zinnias bloom. Not to mention the negative impact on my pocketbook when my kitchen scraps and lawn bits are either free or make my investment at the grocery store and farmer's market go that much further.
How to do it? It seems like there are a million and one ways to make compost bins, the majority of which are incredibly easy. Purchasing one is fine, too, but not really necessary, if you ask me. Once upon a time, I thought it was the only possible way to have one, but it really could be as simple as just making a pile. Check out the books listed here and see what they suggest.