The most effective method I have found is the Karvonen Formula. Before you can begin to calculate your zones you need 2 other basic pieces of information, your Resting Heart Rate (RHR) and your Maximum Heart Rate (MHR). All zone calculations use these as a baseline.
To calculate your RHR, use your trusty heart rate monitor and take a nap. You may want to be on the safe side and take several naps just to be sure... When your wife comes down on you for napping, you can tell her you have to in order to be in better shape. Once you sort out your personal life and get the lowest Beats Per Minute (BPM), you have your RHR.
Now the hard part, sorting out your MHR. Before you do this make sure you have permission from your doctor. The standard disclaimer here: I did this but I am not a pro or a medical professional so if you get hurt or die, don't yell at me.
The most effective for me was doing a regular run workout and at the end I did a 1 mile all out to the point that when I finished, I could not go any further. Of course, I was wearing my HR monitor so I used the highest recorded BPM as my MHR.
This site has a pretty neat calculator you can use that will show you the 'old' method of calculating heart rate zones along side the Karvonen Formula calculations. All you need to know is your age, RHR and MHR.
There are 5 sones to calculate that I think are the most generally accepted. the lower the number of the zone (i.e Zone 1) has the lowest intensity. You guessed it, the higher the number the higher the intensity up to and including your MHR in the upper reaches of Zone 5.
Zone 1 - The Energy Efficient Zone 50-60% of MHR
Zone 2 - The Recovery Zone 60-70% of MHR
Zone 3 - The Aerobic Zone 70-80% of MHR
Zone 4 - The Anaerobic Zone 80-90% of MHR
Zone 5 - The Red Line Zone 90-100% of MHR
In future episodes I am going to see what I can learn about each zone specifically and share.