Add Components to Your Dashboard
Select a component 'type' from the Component tray on the left of the page -- and then just drag and drop it to the position on your dashboard on the right.
There are three columns you can place your component in. And you can place as many components as you like in each column.
Choose the Data Source for your Component
Click on the Data Sources Tab in the left Tray.
Choose a report from one of your report folders, to use as the source of the data. (You can only make dashboard components from reports that are in summary or matrix format)
Add Title, Footer and adjust display of data as desired
1. You can control the width of the component here.
2. You can add a Title here
3. You can add a footer here
4. You can edit the component further by clicking on the wrench which opens the Component Editor
Here you can change the component type, and control the formatting and sorting of the graph or chart.
Click on HELP for this page in the upper right for more details on ways you can control the display of the component.
You set the data that will be viewed in the component by clicking on the "View Dashboard As" lookup in the upper right.
You can either run dashboards so that everyone will see data according to a specific user (such as yourself) -- or to run as logged-in user (meaning they will only see the data they have access to seeing. This way the same dashboard can be used to give access to each individual partner organization to see a summary of THEIR opportunities, for example.)
You can further customize the Dashboards look and feel
Clicking on the Dashboard Properties button allows you to customize the colors and type size of all the components together to get a unified look and feel.
You can also drag and drop dashboard components from one location to another on the page -- allowing you to customize the layout exactly as you wish it to appear.
(Advanced) Chatter allows you a way to share static shots of dashboards with non-salesforce users
Share dashboards with your board (if you grant them chatter licenses). For more details on integrating dashboards with chatter, see these posts in Salesforce Help.
The link at the bottom of this page is broken. Here is are updated links for information on posting dashboards to chatter:
Thanks for the update links Shannon.