There are stories of such wonderful things as a sword that can cut through other swords as if they were butter, or those made of a steel so light and durable that they feel like a feather but preform very well. These are myths. This entry will describe bladesmithing from a realistic perspective.

The Basics

I'll discuss the basics first because that's the practical extent of my knowledge.

Metals

You want to use steel. It's a lot harder than iron, which is an asset if you don't want to get big notches in the blade with every strike. It helps with cutting a lot, but if your blade is too hard, it will shatter. You want, ideally, a hard blade with a soft core. This can be achieved in two ways: a Japanese way and a European way. But more on that later.

For metal, you want steel with a low carbon content. You definitely want something below 1%, and a good amount is closer to .5%. Chromium is also something to be watched; anything more than 13% is stainless steel and very brittle, so you want around 7% for stiffness and sharpness. Of course, you can adjust this higher if you use the European method. Addition of exotic metals such as tungsten can vastly alter the metal. Here's a brief description of some effects.
Boron is desirable when it replaces chromium. It certainly hardens the blade and doesn't affect the ease of working with the steel. It's usually used in very small amounts, around .001% (sometimes as high as .003%). Boron is also useful in conjunction with other metals.
Copper is a bladesmith's enemy. It helps the corrosion resistance of a blade, though it weakens the blade so much that it's not worth is.
Manganese is very helpful at times. It increases both strength and hardness, so be careful when using it. However, it decreases quenching temperature, so you can quench your blade in oil rather than water. This has several benefits, including a lower chance of cracking.
Molybdenum should be avoided, as it increases hardness. Perhaps you could experiment with molybdenum tempering, though, as the cutting edge should be hard.
Nickel is helpful in strengthening and hardening steel. It helps to keep the blade intact during quenching.
Niobium is also very helpful as it softens and strengthens the steel. Use this with some molybdenum, boron, or extra chromium.
Silicon should be used in slight amounts to toughen the steel. It can also add hardness. Rust prevention can be aided by this semimetal, as well.
Titanium can help boron to harden a blade, and it also helps the blade keep its edge. Addition of this is unnecessary for a beginner, though experts might want to use it for masterpieces or competitions.
Tungsten is wonderful. It's like candy or love: everything is better with it. Adding it will greatly reduce the damage your blade takes, and it will keep its edge longer. It strengthens the steel a lot.
Vanadium makes your blade tougher when you temper it.

So what is the best metal to use? I'd use 8% chromium, .4% carbon, .001% boron, .8% silicon, .6% vanadium, .6% tungsten, .4% molybdenum, 8% nickel¹, and no more than trace amounts of the rest. This will make a blade that is very tough and hard and still somewhat flexible.

Forging the Blade: Easy Method

You need some steel and a forge and some equipment: an anvil, hammers, tongs, a tap and die set (large), a leather apron (so you don't drop hot steel on yourself and die), thick gloves², and perhaps a chisel. I may have left some things out; tell me if you experience difficulties.

Get a length of steel about the size and shape of the final blade, along with an extra 12-36cm³ for the tang (part of the blade that goes through the hilt). Preheat it to 650-700 degrees Centigrade, then raise the temperature to 1000-1100 degrees. Now beat it with a hammer until it's the right shape and size.⁴ Narrow and lengthen the tang; you'll build it up later with padding and leather. Let the blade cool slowly (just using the air should be slow enough).

Forging the Blade: Japanese Method Method

Take your steel and a large hammer. Smash the steel to bits. Sort them by carbon content and melt them together again. Pound the blade out and fold it in half. Pound and fold it about twenty more times. Then go with the easy method. Temper it by dripping mud over the blade: thick at the back, none where it will be sharp. Then heat and cool it according to the directions below. Finish as desired.

Forging the Blade: Euro Method

You need to use a soft steel for the core. Form it as previously described for the easy method. Then beat a thin layer of hot, hard steel over the cool, untempered blade. Temper it as described below, though you may want to preheat it a bit longer.

Completing It

In Japan, it takes two weeks to forge a blade and as long to finish it. Here, the method is much quicker: you can make the blade in an afternoon and finish it before going to bed.

Now that you've forged the blade, you have to temper it. From room temperature, heat it to 700 degrees Centigrade, then to 1030 degrees. Soak it in oil for 30-45 minutes, then let it cool in the air. When it is below 80 degrees, temper it for the first time at 350-400 degrees, cooling it similarly. Temper it again in exactly the same manner, after it has reached room temperature.

Now that you've tempered the blade, you can make a handle and a pommel. The first step is to use your tap and die set to put a thread on the end of the tang. Record which die you used so that you can easily get the matching tap for the pommel. Now get a brass knob (for preference; you could use steel or whatever metal you want, or absolutely anything that's hard enough) and drill a hole of the correct size in it (the hole should be just smaller than the tap). Put a thread on the inside of that hole using the tap. If the sword design calls for it, also make a hand guard, usually from the same metal as the pommel. Otherwise, make a small ring⁵ to separate the tang from the blade. Make sure that both fit before continuing.

Now, carve a piece of wood to fit around the tang. It should leave a small gap between them, the pommel, and the guard. This gap should be large (4-5mm each) if you plan on wrapping the hilt in leather, otherwise much smaller (1-2mm). Place the material between the wood handle and the hand guard and press them together as firmly as possible. Wrap them down the hilt to the end of the wood and cut off the excess, leaving a centimetre or so of extra material and tucking that between the hilt and pommel as you screw the latter on.

After you sharpen the blade, you're ready to hack your friends to bits.

Getting fancy

I won't mention methods, but engraving the blade, polishing it until it shines, frosting it, and other decorations make a sword much more beautiful. You'll be the envy of all your friends if you hang a tassle from the pommel.