Find a movie to watch. Get together with your friends and discuss which movie you'll be making rules and drinking to. Usually the more fun and dumb the movie the better time you'll have, so keep that in mind. While it is possible to establish rules and drink to, say, "Schindler's List," it isn't recommended.
Establish the "Constant" rules. These are rules that will be used for any movie you watch, no matter what it is. They are specific to the fact that you are watching a movie, not to the particular movie itself. Think of them as your default rules. Having rules that are constant also helps towards the end of the movie, when nobody can remember the rules for this particular film and you rely more heavily on ones that have always been in play. Recommended "Constant" rules are as follows: Any time you genuinely laugh at the movie, take a drink. Any time you doubt the reality of the movie, take a drink. This doesn't mean any time you think to yourself "You know, I doubt NASA would send Bruce Willis up to destroy that asteroid." It means that even in the context of how silly the movie you're watching is, you still don't believe something. Any time there is a scene that's only purpose is to explain the plot with badly hidden exposition, take a drink.
Establish the "Movie" rules. These are the rules that are specific to the movie you're watching. They can be anything at all. It helps to be at least somewhat familiar with the movie you're watching to make better rules. Anything that happens frequently should be a smaller number of drinks, and things that happen only once or twice should be a higher number of drinks. Suggestions for "Movie Specific" rules are as follows: Any time an actor displays a "Kooky Trait," take a drink. These traits are things like the "Bruce Willis Yell" (watch "Die Hard"==you'll know it when you hear it) or the "Jeff Goldblum Sexy Walk" (watch any movie with Jeff Goldblum--he does it at least once a movie.) If you're watching an action movie, every time a non-main character dies take a drink. Any time a character says a catchphrase (an example being anything Jim Carrey says in his early movies or "Get off my plane!" from "Air Force One"), finish your drink.
Know how to change the game while in play. If you think of a really fantastic rule but the movie has already started, present it to the group and then you all have to drink once to establish it. It is now officially a rule.
Know how to make people drink more than you. If a rule that's been established is missed by one of your friends, make a note of it. If ten seconds have gone by and they still haven't drank, you can call them on it and they now have to drink double. If you can manage to stay soberer the longest, by the time the movie is drawing to a close knowing this rule will really come in handy.