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Step 1
Set up a scenario with two players who are both told that they're accused of a crime by a hypothetical policeman. Make rules that stipulate that turning in your fellow conspirator (who's being interrogated in a different room) gets you off scott-free, if he doesn't turn you in. If neither you nor your co-conspirator accuses the other then you both still get in trouble, just not with a full conviction. If you both identify each other then you get in worse trouble still. But getting identified by your co-conspirator when you don't identify him gets you a full conviction, which is a total loss.
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Step 2
Assign points to each of the possible outcomes of your "interrogation." For example, if you accuse your co-conspirator but he doesn't accuse you (or, in words of the game, if you "defect") you get five points. If you both defect you get three points. If neither of you defects you get one point. And if you don't accuse your co-conspirator but he accuses you, you get zero points (and he gets five).
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Step 3
Play the first round of the game by deciding what you feel is the best choice in the iterated prisoner's dilemma. Write your choice down and have your opponent (your co-conspirator) do the same. Then look at each choice and score the game according to your point system.
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Step 4
Make the prisoner's dilemma iterated by playing repeated rounds of the game so you can make each successive choice on the basis of your opponent's previous decisions and choice patterns.
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Step 5
Continue to play the iterations until one of you reaches an arbitrarily decided score between 1 and 100. At that point the iterated prisoner's dilemma game is over and one of you wins.
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Step 6
Improve your play by practicing alone at the online Iterated Prisoner's Dilemma game at Iterated-prisoners-dilemma.net. Add a random intervention variable to make the game more interesting.
