I make this delicious yogurt all the time. It is cheap, delicious and incredibly easy. Hubby and I have it every day on our cereal and even my 5 year old loves it. My 8 year old has yet to be convinced, but you can't have everything.
I use an Easy-Yo for this, but you could easily use a Thermos flask, or even a container placed in a well insulated cool-bag or similar.
Start by taking 1.25 cups milk powder (I use full cream) and a couple of tablespoons or so of plain yogurt (I use some left over from the last batch, but you can use shop-bought yogurt - you might need to experiment with one or two brands to find the one that sets best). Put these into the 1 litre Easy-yo container, which is partially filled with cold water. Fill the container to the top with water, put on the lid and give it a good shake to mix.
Fill your kettle and boil approximately 1.5 litres of water to place into the Easy-yo insulator to the top of the red line.
Leave for approximately four hours or overnight.
And voila, perfect set yogurt. By the way, set yogurt contains more beneficial bacteria than other kinds of yogurt. You can add fruit or other flavouring at this stage, but I prefer it plain. Enjoy.