This How-To is a compilation of posts by IowaEagle and Gil-SX4.
First, drain enough coolant from the radiator so there won't be a big spill when you remove the top hose. Follow the top radiator hose to where it hooks up to the engine block; at that point is the thermostat housing. Remove the hose. The thermostat housing has 2 bolts; go and remove them. Once the bolts are removed the housing should come off with bit of pressure since it is most likely stuck to the gasket. The thermostat will most likely also come off with the housing. Make sure and clean off all the old gasket material on both the housing and engine.
To reinstall: Place the thermostat in the engine block (make sure it is installed in the correct direction; the spring goes into the engine block). It will fit neatly in a recessed groove. Place the gasket on the thermostat housing and one of the bolts then line up over the thermostat on the engine block. You may want to use Fel Pro Hi-Tack cement to hold the new gasket in place -- make sure and follow the instructions on the cement.
Turn the bolt just so it will stay in place, install the other bolt and finger tighten both bolts making sure the gasket and thermostat are aligned and in their proper position. Now, here is the hardest part; tightening the bolts. Use a socket wrench if at all possible and make sure you don't over tighten them since you will break the housing. Work from side to side tightening a bit at a time. (If you have a torque wrench the final setting is 13 foot pounds.) Replace the hose with a new clamp, fill up radiator with fresh antifreeze, check for any leaks and you're done. I recommend getting a extra thermostat housing and gasket, that way you will not have to drive back to the parts shop once you break the housing that is on there now.
NOTE: The little hole in the rim of the thermostat needs to go in the 12:00 position. This helps reduce the chance of air getting trapped in your system -- especially when you refill. If there is no hole you have to drill one. (Hope to have a picture soon.) You will know there is air in the system within a couple of minutes or less as your temp gauge will spike. Shut off engine and let it cool down. If you have a flushing tee take the cap off -- again after system has cooled down and cap is off radiator. Then slowly add coolant; this will expel the air out of the flushing tee opening. Make sure tee is in the full upright position before doing this. If there is no flushing tee you can start engine with radiator cap off and add coolant gradually until full. You should have a helper watch your temp gauge in order to shut off engine if the gauge rapidly goes up and spikes. Usually trapped air will expel itself out of the system quite quickly. And, make sure heater is turned on to circulate coolant and remove any air that might have gotten trapped in the heating system.