Remove all window coverings, such as drapery or blinds. Take down the trim from around the window by gently popping it off with the pry bar. Be careful not to damage the trim so that you can reinstall it later.
Pull the window sashes toward you. These are the pieces of wood enclosed glass that make up the bulk of the window. If there are more trim pieces that are holding the sashes in, remove them before trying to pull out the sashes.
Lay a strip of insulation on the windowsill. In older homes, windows were not generally insulated, so now is the time to do it. Set the new window into the opening created by removing the old window. The new window should be flush with the outside trim from the old window.
Check for level and shim underneath the window as necessary. Use the level against the side of the window and check for plumb and add shims to the sides if needed. If you do add shims to the sides, check for level again. Repeat this procedure until the window is level and plumb.
Attach the new window with the screws that came with it. Drive a screw through the pre-drilled screw holes in the sides of the window. Add more insulation to the sides of the window.
Reinstall all the trim pieces that were previously removed, using the finishing nails and hammer. Load the caulking gun with caulk and run a bead of caulk around the window where it meets the trim. This helps to further seal off air leaks.