Put the milk in a 2 quart pan and sprinkle on gelatin. Let soak 5
minutes or so then stir with a wire whisk while heating to almost
boiling (to pasteurize). Cool to warm. Add 1/4 cup commercial yogurt
(unflavored) and whisk in until incorporated. rinse out small hars
with hot water and fill with warm yogurt mixture (1/2 pint canning
jars work well for this and are approximately the size of serving
size you get in the store). Set in a warm place overnight, covered
with a blanket.

I have read that you can incubate the yogurt by pouring the yogurt
mix into a warmed thermos bottle and letting it sit overnight.
Personally, I use the Salton Yogurt maker that I found at the
Salvation Army for $2.00; it works every time.