Green Dragon is very simple to make. Everyone else seems to have covered all of the basics, but...

Using a hot water bath when heating the mixture is the safest way, but its not necessary if you have decent quality cookware and an electric stove. I've never used it. Just keep it below medium heat. It doesn't take a lot of heat for the alcohol to leach the THC. Even the lowest setting will work, and will probably produce better results than high heat.

Using kif or hash is best if you don't want you mixture to be green and reek of marijuana. The alcohol leaches other chemicals in the marijuana, not just the THC and other canabinoids.

And lastly, it seems letting it sit for at least a week is the best way, according to conniseurs. It ages like a fine wine, and gets darker over time. The only danger of doing this is oxydation (which lowers the alcohol content), which is not really a concern if you don't have a lot of air in there.

As other people have said, a higher proof grain alcohol is best. Everclear works perfectly. And beware, you don't need a lot to get high off of this. A decent amount of bud will produce potency enough for one shot to get you stoned. Give it a little time to sink in, and don't drink a ton of alcohol if you actually want to get stoned. It's very easy to overdo it if you drink too much Green Dragon, and it's not fun. You just lay on the ground feeling completley lethargic and fucked up. Been there, done that.

~Ethno