Compost is garden soil made out of things that used to be alive. Plants love it. What is the easiest way to start a compost pile? Designate a space in your yard to be the compost pile, about three feet wide. Then add weeds, straw, leaves, dirt, water, and kitchen scraps. That is all you have to do. If animals get into your compost, enclose it in a cylinder of stiff wire mesh fence. (Editor’s note: I have posted a link to an article that goes into greater detail that follows this "basics" one).

What Goes Into a Compost Pile?

   1. Air. Compost needs air; do not enclose it in an airtight container. You can stir the compost, but you do not have to.
   2. Water. Add enough water to keep the pile damp but not soggy.
   3. Yard Waste.  Grass clippings, leaves and weeds are good. Avoid crab grass. Buy straw, not hay, if you have no dry weeds.
   4. Soil. Ordinary soil contains organisms that help the compost break down. Soil also helps control odor. Also, a shovel-full of finished compost is great.
   5. Kitchen Waste. Most of what you normally put down the garbage disposal can go into the compost instead. Keep an open compost bowl in your kitchen and dump it on the compost every day. Do not use a closed container; it will cause the scraps to stink. Good materials include: peels and rinds, smashed egg shells, fruit and vegetable trimmings, non-greasy leftovers, coffee grounds and stale bread. Avoid meats and sweets and greasy foods because they attract pests.
   6. (Optional) Manure. Manure speeds and enriches the development of compost, but you do not have to use it. Avoid dog doo; dog waste contains harmful microorganisms. You can put dog doo into the soil under a non-food tree where you do not expect to be doing any gardening. Good manure comes from horses, cows, rabbits and chickens. Take a trip to a farm and get some manure. It is OK to include the straw or sawdust bedding.

Other good ingredients for compost include: seaweed, earthworms (night crawlers or red worms), unbleached paper products (such as brown paper bags), and wood shavings.
What Do You Do With Compost?

The compost is ready to use when it has turned into rich soil, and you cannot recognize individual ingredients anymore. In three months, start a new pile. Give your original pile two more months to decompose. The amount of compost will be much less than what you put into it; it will have broken down. Mix it deeply into your garden soil. You will be contributing to the Earth’s topsoil.
This is from an article from Pam Walatka 2004

CLICK HERE for a longer, detailed how-to article.