Place a level on the doorway subsill, or the floor that will rest under the door sill of the prehung door kit. Check the sides of the doorway. Take note if the bottom and sides of the doorway are not level, since this will demand correction later in the installation.
Set the caulk gun on one side of the doorway, about 3 inches up from the subsill and 1 inch from the outside edge. Squeeze out a thick bead of caulk down the doorway, across the subsill and up the other side to end opposite where you started. Squeeze a second matching bead of caulk on a line 1 inch from the inside edge of the doorway.
Place the door kit in the doorway, bottom first.
Stabilize the door kit's position in the doorway by driving shims into the spaces between the door frame and the doorway. Start with the space between the door sill and subsill, and then go to the area behind the door hinges, and finally put shims along the hinge jamb (the part of the frame with the hinges) in general. Continue driving shims until the door frame is reasonably stable and, if they were not already level, vertically and horizontally straight.
Secure the door temporarily by hammering in two or three 16d finishing nails through the hinge jamb. Leave the nail heads exposed, so you can pull them out later more easily.
Check the door's alignment. Open and close the door to see if it has a smooth passage. Step outside, close the door and examine the door and door frame for even contact with the weatherstripping. Go inside, close the door and check for an even, narrow gap (not more than 1/8 of an inch wide) between the door and door frame.
Drive at least one shim into place underneath where the lock and knob assembly of the door and door frame are, between the frame and doorway. Adjust the door frame for any problems found in Step 6 by pounding in shims behind the lock and knob side of the frame to compensate.
Drill holes and drive screws as indicated by the door kit to permanently fasten the door frame to the doorway. You can only drive screws in places where there is a shim-backing, however, or you risk distorting the door frame.
Pull the temporary finishing nails up with a claw hammer. Stuff the empty cracks between the door frame and doorway with low-expansion insulation by hand. Install any trim that came with your pre-hung door kit, following the directions of the manufacturer.