To make yogurt, first put milk in a stainless steel or enameled pot and heat it on the stove. Use a metal spoon and heat it slowly to scalding, between 180-185 degrees F. I use a meat thermometer that clips on the side of the pot. Stir it slowly so it doesn't burn on the bottom.
Once it's at about 180 degrees, turn off the heat and let it cool to incubation temperature--about 112 degrees. If you keep it at room temperature, this will take about an hour, or you can put it in the fridge to speed up the process. Then you can add nonfat dry milk powder to thicken it, if you want. Use about 1/4 cup powder per quart of liquid milk. Then add the starter, which is just regular yogurt from the store. Make sure it has "live and active cultures." I use plain lowfat. You need about 2 tablespoons of yogurt per quart of milk. Fold the starter in gently until it's throughout the whole milk. Then incubate the yogurt and let the cultures grow. Pour the milk into individual smaller containers or a better, non-metal container. I use a glass bowl with a lid. You need to keep the yogurt between 105-112 degrees anyway you can. I put it in the kitchen sink in hot water that I boil on the stove and I check it occasionally and add more hot water if I need to. Yogurt can survive between 90 and 120 degrees so if the temperature dips lower than 100 all is not lost. Incubate it until it's thick enough to your taste and preference. My yogurt usually takes at least 4 hours to thicken, probably more, so I have to stick around the house all day. I also cover it with a lid or towel to keep the heat in.
When it's thick enough, you can add any flavoring, I like vanilla and fruit.
My yogurt usually has a lot of watery whey on top which can be removed easily. I like to use it in recipes, like smoothies, casseroles, or anything else. It's also good plain with a little flavoring! And oh so natural and frugal!
Here are some other links for yogurt making: