Get your supplies:

Tattoo Kit(we used Weston's Pet Owner's Plier Kit for small animals)
Rubbing Alcohol
Vaseline
Rug
Rags
Paper Towels
Q-Tips
Cotton Balls
Paper for Practice
Camera
Strong Help
Gloves are optional. I've never needed them, but they might offer some scratch protection.
Some people recommend using a Bunny Wrap or Tattoo Box, especially if doing this on your own, with a larger rabbit, or an extremely fiesty rabbit.

Choose your letters and/or numbers:

Make sure that you know what you want before you punch the rabbit's ear. The letters and numbers are backwards if you look at them right. To put them in the pliers, hold the pliers with the area for the letters facing down and the pinch end towards you. The letters must be upside down to you and the first letter must be put in the left side of the plier. Test the design on a piece of paper and make sure that it is correct and the way you want it.

Apply Alcohol:

Use a q-tip or cotton ball and soak with rubbing alcohol. Wipe the inside of the rabbit's left ear throughly to sterilize.

Punch Tattoo:

Have the strong help get a firm grip on the mid section of the rabbit while it is sitting on the rug. Depending on the rabbit's temperament and size, you may need to have the help cover the rabbit's eyes and mouth with a rag. You might also need someone to hold the rear end of the rabbit to control the kicking and flailing that might occur. Open the left ear and carefully center the side of the pliers with the letters in an area of the ear with the fewest veins and fur. Make sure the first letter is towards the bottom of the ear near the head of the rabbit. Squeeze as hard as you possibly can. It is sometimes best to squeeze, squeeze harder, and then even more harder to make sure the ear is fully punctured.

Wipe Up Blood:

Use a cotton ball or paper towel and dab up blood inside rabbit's ear.

Ink the Ear:

Ink and a brush should come with your tattoo kit, if not you should have purchased it prior to now. Dip brush into bottle of ink being very careful not to spill. Brush lots of ink into holes in rabbit's ear. Dab rest of ear with cotton ball or paper towel to remove excess ink. If you get any ink on yourself or anything else, wash immediately as ink is permanent!

Vaseline the Ear:

Put a large amount of vaseline on a q-tip and wipe inside of ear with it throughly. This will help stop the bleeding and hold the ink in the ear holes until it heals.

Voila!
You have a tattooed rabbit. If you are looking for tattoo supplies, I highly recommend the following companies:

Stibbar Equipment
Damar's Equipment
Bass Equipment
KW Cages