Raw Butter

To make butter, you will need whole cream.  You can either buy cream, or skim cream off your milk.
Jersey milk has the one of the highest butter fat/to milk ratios for cows.  This means that for every gallon of milk you should have 2+ cups of cream.  You will need to let the milk sit, undisturbed for
at least 8 hours so that the cream can float to the top of your milk.  When you look at the jar of milk from the side, you will see two distinct layers.  The top layer is the cream.  Remove the lid from the jar carefully so that you do not shake the jar. Using a ladle or big spoon, carefully start removing the cream from the top of the milk.  When you get closer to the milk, be careful to only remove the cream and leave the milk in the jar.
The milk in your jar is now "skimmed" milk and has much lower fat content.

To make the butter, you will need to let the cream come to room temperature (about 65-70 deg F).  If it gets warmer than that, you may have trouble getting the butter to separate.  If you want "sweet butter" (what most people buy in the store) you will want to "churn" your butter soon after it gets to room temperature.  If you want "cultured butter" you will want to let the cream sit on your counter for 3-4 days until the cream sours.

You can use several of your kitchen power tools to churn the butter or you can use some manual methods. 

Method 1
Put the room temperature cream in a blender and blend on the lowest speed until you see little yellow balls of butter floating in the buttermilk.  

Method 2
Put the cream in a food processor and pulse until you see the butter separate from the buttermilk.

Method 3
Put the cream in a bowl and use a hand mixer electric or hand powered egg beater.  Beat past the whipped cream stage until the butter separates from the buttermilk.

Method 4
Use the same as Method 3 but with a stand mixer.

Method 5
Put the cream in a bowl and whip with a spoon until the butter forms. (The most labor intensive method)

Method 6
Put cream in a jar with a tight fitting lid and shake until the butter separates from the buttermilk. (Second most labor intensive method)

Pour off the butter milk.  You can drink it if you like or save it for baking.  Some of the best cake and pancake recipes call for buttermilk.

Put the butter in a bowl that you can move it around easily and press it with a spoon.  It is time to wash the butter.

Washing the butter

The next step is to wash the butter.  If you do not wash the butter, it will start to taste funny in a few days (even in the fridge). Fill the bowl that you put the butter in with cool clean water.  You will notice that the water looks milky.
Swish the butter around and try to break it into small pieces so that the water can wash out all the buttermilk.  Pour off the water holding the butter in the bowl with the spoon.  Add more water and repeat.  Keep repeating until the water is clear.  Now comes the hardest part.  You need to take the spoon and press as much water out of the butter as possible. I find a wooden spoon is good for this as it is almost flat and you can use the front and the back of the spoon to press with.  You may want to put the butter in a colander or strainer and let it sit in a bowl for a while and drain, before trying to press the water out. 
The goal is to get all the water out.

After the water is out, you can salt the butter if you want salted butter (or leave it unsalted).  Start with just a little salt, mix it in and taste it.  Keep adding until you are happy with the amount of salt.

Put the butter into a container and keep it in the fridge. I find that glass jars work well for this. Well washed butter keeps for months.  If you have too much butter, put it in a freezable container and freeze it.  When you want to use it, take it out and thaw it.

It is hard to beat fresh made butter on warm, homemade bread or biscuits!  Enjoy!