1. You will need a memory card reader, phone USB cable won't do
2. Insert the card using card reader into your pc
3. There are many partition tools available for free online. Using one of them make two partitions in the sd card
4. One will be fat32 and the other will be ext2 or ext3. Depends on your cards capacity. But let's not take the risk and go for the safest ext2. Remember to make both the partitions primary. Fat32 will be your memory cards memory for media which will be recognized by your phone and ext2/3 will not be recognized now.
5. Install link2sd from the market. It's free. It will ask to reset your phone to recognize the additional memory.
6. Now you are ready to move all the apps+data to your card. Just select one by one and in the next menu click on Link
7. Then tick all the boxes and continue. Everything will move to that additional phone memory and work same as before
Also remember that you can not link your apps unless you have them wholly in the phone memory. So if they are in sd card in the Froyo way, move them back to phones memory at first and then link them to sd. I have installed around 90 apps including big games like Pro Evolution Soccer in my phone of 176MB phone memory. I hope it will help you too.