Make a list of the songs you wish to mix. When mixing on a computer, mp3s are the preferred song file format.
Gather your mp3 titles into a folder.
Open Mixed In Key, or a similar key-detecting program, and submit your folder of songs for scanning. Mixed in Key will scan your files and give you a detailed list of song keys and tempos for each of the songs in the folder.
Look for songs that are in the same keys and relatively close in tempo, as these are the songs that will mix together with the least amount of effort.
Open your DAW. Today's DAW market hosts a wide range of DAWs that vary based on both pricing and capability. Some of the most popular include Propellerhead's Reason, Sony Acid, Ableton Live and GarageBand.
Drag one of your chosen songs into track one of the arrangement view. Some programs will automatically adjust the overall tempo to match the track, while others require you to manually match the overall tempo to the added track.
Drag another song into track two and position it near the end of track one so that the two overlap a little. These files are presented in waveform, which makes it easier to visualize where the beats line up.
Align the waveforms so they are in time with each other. If you have chosen two songs in the same key, they will already be harmonically matched.
Using the fader tool that comes standard on every DAW, slowly fade up the music on track two so that it is at the same volume as track one at the time track one ends. This ensures volume consistency from song to song.
Repeat Steps 3 to 6, adding as many songs as you wish to your mix.
When your mix is complete, render it to a .wav or .mp3 file so you can burn it to a CD or sync it to a portable mp3 player.