The easiest way to set up your bibtex file is to start in xemacs.

Open a file in xemacs with the extension bib.  For example, open a file ex1.bib and see something similar to:

Next, you want to put in you first entry.  Right click on the emacs window and you will get see the following menu:

To enter an article from a journal, right click on the first item, Article in Jounral.  You will then have the following text in you emacs editing window:

Fill in the blank spaces.  Only the items in blue are required.
For example:

Under bibtex-edit, moving inside an entry, there is a selection to clean the entry.  Doing this will remove the spaces for the fields you did not fill in.

To cite the article in a latex file, try something similar to the following latex code:

\documentclass{article}
\bibliographystyle{plain}
\begin{document}
This is how I would cite a paper~\cite{laird82} from my bibtex file.

\bibliography{ex1.bib}
\end{document}

Then latex and bibtex your file.

>latex exbib.tex
>bibtex exbib.tex
>latex exbib.tex

You may have to latex the file one more time after this to get the references right.

The resulting postscipt file looks like:

There are many different styles for your cites inside the paper as well as for the layout of the references section.  Explore!