Here's how we do it:
First, you need

-1 bar Fels-Naptha, 2 bars of Ivory bar soap OR (the cheapest option) 1 bar of Zote but you'll have to double the other ingredients
-1 Cup Washing Soda
-1 Cup Borax
-a smallish air-tight container
All of these ingredients (except the Ivory- that's in the body soap isle) can be found in the laundry isle at WalMart.
The first time I made this, I used Ivory and to get it small enough to go in laundry detergent, I nuked it in the microwave. The effects were SUPER cool to watch! (Kind of like those "snakes" you buy at the firework stand.) The kids enjoyed being in on this. When we ground it with our hands, there seemed to be a lot of Ivory smell that was a very overwhelming. I managed to mix it all in and it worked great to wash with. I was a little concerned about the strong Ivory smell making our clothes smell like that but it never did.
The rest of the times I've been using the Fels-Naptha. Unless you want to experience the cool affects of microwaving Ivory bar soap, I would recommend preparing the Ivory the same way I've done the Fels-Naptha.
1st - You need to grate the bar of soap. You can do this with a cheese grater or a food processor with a cheese grater. I used a food processor but needed to cut the bar first in order to fit.

I ground some washing soda in with the grated soap in order to make it even finer.
2nd - Stir together the grated bar soap, 1 cup of the borax and 1 cup of the washing soda. The clear container with the flip-top blue lid is what I've been using to store mine in and though it's not technically "air-tight", it's been working fine.
3rd - To wash, place 1 heaping Tablespoon for large load in washing machine while it's filling with water (before clothes are in). Once the soap has dissolved, which doesn't take long, add clothes.
Special Notes:
-Your clothes will not smell like the detergent when it's all done.
-For a clothes deodorizer, place 1/2 to 1 cup of vinegar to the fabric softener section in your washing machine. This method seems to be VERY effective!
-For an all natural dryer experience (since I've been reading a lot about how toxic dryer sheets are), you can use wool dryer balls. I'm hoping to post soon on how to make these out of 100% wool yarn.