I'll answer your second question first..
When the person registers, they need to put your forum username in the "referred by" field of the registration.
How you refer them is up to you. We have a pretty handly little referral box on the front page, you just fill in your name and email as well as their name and email... It then sends them all the info they need to visit the site. Or, you can do it the old fashioned way - send them an email on your own, call them up or drag them to a computer and show them
Let me know if you have any other questions about this.