To begin, start be determining the type of sound you want to achieve? How dry or open do you want your snare to sound?
Examine your options. There a variety of ways to muffle a snare drum. Some drummers prefer around the house items like duct tape. You can tape a business card to a snare head for a light muffle. In recording situations, engineers have been known to tape a wallet to the snare. The heavier the material and the more you use, the more "dry" or dead your snare will sound. If you are looking for a more professional approach you can purchase a retail product such as Evans E-Rings. They come in several different sizes. The muffling material you choose all depends on the sound you are going for.
Experiment. Try all of the above materials and find which comes closest to the sound you want to achieve.
Talk to other drummers. Listen to other players at live gigs. When you meet a drummer who has a sound that you like, ask him or her what she is using to get that sound.
Record your snare drum. Try recording your snare drum with the different kinds of materials so you can take an objective step back and really listen to the sound. In the end, it is your sound. Trust your ears!