Stop thinking of what you will say next and listen to what the person is saying, understand what they are saying before taking any action, try to see things their way...not just as a way that is wrong compared to yours.
FLFrog has the best answer imo.. but I would like to add eye contact. Not only does focusing on what they are saying and not what you'd like to say actual accomplish the listening... but the eye contact itself will tell the other person that you are listening.
The most important thing is eye contact and nonverbal feedback. Nodding, raised eyebrows, expression that says "go on", confused look, shrugs - there are numerous nonverbal actions that convey interest. Of course, focus solely on the other person - no texting, playing games, watching tv, or anything like that! Hawkmann, I think you're a good listener! Just looking to improve?
Here's what you do....hey, I'm talking to you. Ok here is what....look at me when I'm talking to you. Are you listening to me? How can I teach you how to listen if you don't listen? Dude, you have to learn how to listen.
Number One: Shut Your Mouth!! Seriously -- it's reeeaally hard to listen to someone if you're talking & you keep interrupting them. Number Two: Pay Attention!! Really pay attention to what the person is saying. Don't think about your problems, what's on your mind, what YOU want to say, the next topic you'd like to talk about, etc... Focus ALL of your attention on the other person's words. Once they've said what they want to say, THEN it's your turn to say something. NEVER interrupt, it's beyond annoying!! If it doesn't come naturally to you, it can be a bit difficult to learn to be a good listener... but you can do it! Happy Conversations! :)