Before using most telescopes, except for Dobsonian and fork mounted telescopes, they must be aligned with the Earth's axis, and the Right Ascension and Declination circles on the telescope need to be initialized. I call the method that follows the 'Good Enough' method for casual observation.
A much more accurate (and time consuming) alignment must be done if you want to do astrophotography. Check out several different explanations on the "Precision Polar Alignment" page in the Advanced section for in-depth alignment procedures.
Easy Two-Star Method of Polar Alignment
By Ron Evans, Fort Worth Astronomical Society
From a chart listing stellar coordinates, pick any two reference stars that you have coordinates for; one as far NORTH as possible (preferably Polaris) and one as far SOUTH as possible (preferably Arcturus or Hamal).
1. Initially align the mount as closely as you can, usually by setting the Declination (DEC) to 90 degrees and sighting on Polaris. If Polaris isn't visible, just estimate North.
2. Aim the telescope at the SOUTH reference star by swinging the telescope in Right Ascension and Declination. Set the scope's Right Ascension (RA) setting circle to match the star's RA coordinate shown on your chart.
3. Find the coordinates of the NORTH reference star (preferably Polaris) and swing the telescope in RA and DEC until the setting circles read those coordinates. Don't sight in on the star; aim in on its coordinates.
4. Adjust the polar alignment by moving the scope in ALTITUDE and AZIMUTH until the reference star is centered in the field of view. DON'T move the scope in RA or DEC.
5. Repeat step 2 once or twice until no further adjustment is needed. Tighten all adjustment locks and verify alignment by aiming at a few other stars and checking their coordinates against your star charts.
When you aim at Polaris' coordinates, be sure to use the correct side of the 90 degree mark. Examine the chart carefully and you'll see which side of the pole Polaris is. Switch to high power or illuminated reticule eyepiece for exact centering of reference stars and increased accuracy. This method is unsuitable if you wish to do astrophotography. Highly accurate polar alignment is required. Stop by a local astronomy club's meeting for expert help.
The North Celestial Pole (N.C.P.) lies less than a degree away from Polaris
From amateur astronomer Howard Banich, "NCP = North Celestial Pole, which is the actual point in the northern sky that the Earth's axis of rotation points at. Look on a star atlas for the point where all the lines of right ascension converge at 90 degrees north declination - that's the NCP. Polaris is very close to, but not quite on the NCP. Equatorial mounts need to be aligned to the North Celestial Pole for perfect tracking."
"Polar Aligning Your Telescope," By Michael Porcellino, ASTRONOMY Magazine, May, 1992.
"Dialing for Deep-Sky Objects," By Mark J. Coco, ASTRONOMY Magazine, February, 1993.
Celestron Website, http://www.celestron.com/polar.htm, Polar Alignment.