Alright, the average person may not ever need to terminate (crimp a connector onto) the end of a Category (Cat) 5 cable, but perhaps you will someday. Just in case you do, I hope to create a foolproof guide containing all the information you need to do so. But enough of the intro, you came here for some info, so let's terminate some cables!
The Cat 5 standard has been updated to the Cat 5e standard. However, the crimping configuration remains the same, so these instructions will work for either standard.
There are some excellent additional tips and elaborations on procedure in the comments, so I'd recommend that you read those too as you go through these steps.
Step 1: Materials
In order to successfully terminate your Cat 5 cable, you will need:
~ Cat 5 cable
~ 8P8C (8 pin 8 contact) connectors - (these are also referred to as "RJ45" connectors)
~ A modular connector crimping tool
~ Wire cutters/strippers (may not be needed depending on crimping tool)
Step 2: Prepare Wire
First, strip off one half inch of the outer jacket on the cable. Do not cut the colored strands of wire, and note that this is the material holding all eight strands of wire together, not the coating on the individual strands. It is important to not strip off the colored coatings on the small wires, as these will be used for identification later. It is also important to strip close to one half inch off. If more jacket is stripped, the connector will not properly grip the cable, and the crimp may fail. If less jacket is removed, the strands may not fully insert into the connector. Depending on what kind of crimping tool you have, it may have a feature built in to do this for you. However, I prefer to do it myself because the crimping tool usually cuts half way through some of the strands.
As mentioned by cwolsey in the comments, you may want to strip off more than 1/2 inch, arrange the wires (which you will learn to do in the next step), and then cut them down to length to make sure they're straight on the end.
Step 3: Put the Strands in Order
There are two orders the colored strands can be put into before inserting them into the connector. Both standards: T568A (A) and T568B (B) work equally well. One cable using the A standard can also be connected to another using the B standard and the system will work fine, but it is important that both ends of the same cable are terminated using the same standard.* The color order for each specification is illustrated in the second picture. Get the wires into the correct order for whichever standard you are using, and flatten them out in order. If you have difficulty getting the wires in the right order, keep trying. It can be done.
*Unless one is trying to create a crossover cable. You can read about them here: http://en.wikipedia.org/wiki/Crossover_cable
Step 4: Insert Cable Into Connector
Perhaps the hardest part of terminating a Cat 5 cable is inserting the cable into the connector while keeping the strands in the right order. Once the strands are in order, insert them into the connector. Once they're in, check to make sure they're in the correct order by color. Then, push the cable into the connector so the strands go all the way to the front.
Step 5: Crimp
Insert the connector into the crimping tool and use your big muscles to squeeze the handles until it's crimped. (As mentioned by Servelan in the comments, you should push the cable into the connector as you crimp to make sure it doesn't come out.) If your tool ratchets, you'll know it's done when the ratchet releases. If not, just squeeze nice and hard to make sure you get it tight. Congrats, you just terminated a Cat 5 cable! If you need to terminate both ends (as you likely will), repeat the steps in this Instructable, making sure you use the same order of wires (specification) that you used for the first end. Now you no longer need to bow down to the man and buy expensive 5 foot patch cables. You can get some cable cut at the store and make your own, as long as you need, and much cheaper too.
Step 6: Keep Those Tabs From Breaking Off
8P8C connectors are great, but they have a problem. The little tabs that hold the male connector (the one you just crimped onto a cable) in the female connector (what you will plug your cable into) always break off. When this happens, the cable just falls out of the receptacle, and that's no fun. To keep the tabs from breaking off, you can buy little things called boots to put on the cable, but they're expensive. Instead, just wrap some tape around the back portion of the connector and tab. Make sure you don't tape any part of the connector that has to go into the receptacle. You might want to use some more durable tape (such as electrical or quack quack) than the plastic stuff of a certain brand that I used. It's starting to rip.