BestFares had an article about this recently, but i can't locate the link, so i'll just repeat what i read:

1. arrive at airport 90 min before departure
2. get to gate before it opens and be first in line
3. ask if flight is oversold and if volunteers are needed
4. ask what compensation is being offered
5. if you like the compensation, volunteer
6. be a savvy negotiator, but don't hold out too long
7. ask what flight you will be protected on (get protected under rule 240)
8. carry a flight schedule to tell agent what flight you prefer
9. make sure you are confirmed on new flight
10. if next flight is overbooked, repeat process

note: be aware that if bumped, your baggage may arrive at destination before you do.