First figure out whether you'd like to create a subtle color effect or do something a bit bolder. Subtlety is actually pretty easy here and it can be immensely useful. One of the most popular reasons to gel a flash is to warm it up a bit to create subtle warm tones on skin and make a portrait more pleasant and inviting. A simple warming gel-such as a Rosco quarter-sun-can provide just enough orange tint to give your subject a healthy glow.
Want a more dramatic effect? Cut and double up that gel to turn a quarter-sun into a half-sun. Double it again and it's a full-sun, making a very warm orange light source. This may still be appropriate, even for a realistic effect, if you're mimicking the look of a sunset glow. With other colors, it may look fake, in which case push it even further and discover the fun of dramatic colorful lighting effects.
Instead of orange for warmth, consider blue or purple to cool off a scene or subject and set the mood. If you're using multiple lights, put one on the fill to let the main light remain neutral but to give the fill a colorful kick. How about red for a dramatic impact, or pink or yellow or green...No matter the color, the technique is simple: buy a sheet of gel (for just a few dollars, it's one of the least expensive photographic tools you can buy), cut a piece the size of your flash and tape it on. Studio strobe, hot-shoe mounted or point-and-shoot flash, the effect is the same every time-and it's easy and affordable to repeat.
When colorizing a light source, don't forget to manually control the white balance. Set it to the predominant source in the area-be it daylight or tungsten or fluorescent-and then gel the flash. If you use auto white balance with a gelled strobe, the digital camera will compensate for the colorized light, producing images that are balanced incorrectly, often in odd and unattractive ways.
One more tip: For photographers with point-and-shoots or external flashes and a microscopic budget, get a sample pack of gels. These samplers usually have every color under the sun (including diffusion and other specialized modifiers) and they're just the right size for covering small sources-like flashes. For just a few bucks, though, you'll get enough gel to last a lifetime.