This is so incredibly simple its almost embarrassing that I haven't done it until now. I got the method from one of my favorite books ever, The New Whole Foods Encyclopedia by Rebecca Wood. I will quote her later.
Ghee, if you're not aware, is a staple in India and is known in other cultures in slightly different versions and by names such as samna baladi, Smen, and niter kibbeh. It is basically clarified butter but cooked longer, so the milk solids have been removed by a slow cooking process, leaving only a toasty gold fat.
1 lb butter (four sticks, or one box)
A pot to cook it in
A mesh strainer
A container for storage
...and that's it. You don't even need a spoon to stir it with. There are alternative recipes that call for various spices and things like onions and garlic, but I wasn't ready to mess with that on my first try. I just wanted classic, simple Ghee.
Step one: melt the butter in a pan.
Step two: bring it to a gentle simmer.
Step three: wait. Let it simmer uncovered for at least half an hour (mine took about an hour) and do not stir.
While it is simmering it will make a sort of crackling noise like oil when its heating up for deep frying. When the noise changes to a more normal rolling sound like boiling water, and there are brown (preferably not black) chunks of solid matter on the bottom, and the ghee itself is clear and honey colored, it is done.
Take it off the heat and let it cool enough that its not a hazard to work with. Set up your strainer over a bowl or whatever container you are using for storage. Strain out the solid chunks.
And now you have ghee. You can store it in the fridge for months if not years, and if you are comfortable with it you can probably store it at room temperature too, but don't let the health department know I said that. I have a feeling I may have overcooked mine a little bit, but I'm hoping to gain more finesse at this the more experience I have. And it smells great anyway, so I'm not too worried. I have a feeling this is a very forgiving process.
Ghee is used for sauteing and also in baked goods. For more uses, refer to any Indian cookbook. My jar smells absolutely wonderful and I'm looking forward to using it very soon.
From Rebecca Wood's Whole Foods Encyclopedia:
"(Ghee) is an anticarcinogen, makes food easier to digest, enhances their medical action, gives food a clean-looking appearance, and it imparts an ambrosial flavor to both sweet and savory dishes."