This gal offers a full tutorial, details, and trouble shooting. Here's the cut to the chase version:
1 qt milk
1 tsp good Greek yogurt
1/4 C powdered milk (optional if you want added calcium)
(I triple the recipe.)
heat milk to 175-180 degrees
cool to 110-120 degrees
whisk in starter yogurt and powdered milk
Cover the container and keep it at 100 degrees or so for 6-14 hours.
Personally, I put the container on a heating pad set to medium and leave it sit all day. Also - wrapping it up in a towel and closing in in the microwave works well too (the microwave is small, enclosed, insulated).
Once done, pour through a bouillon strainer. Once strained store in a covered container in the fridge. If you want yogurt cheese, simply strain it all night.