You may not be a Hollywood movie maker, but you can still make quality short films.

[edit] Steps

Use a good quality camera (3ccd mini dv, or better). Aim for one with a built-in microphone which can pick up sound more than an inch away.
Have a tripod to use with the camera to eliminate shaking.
When first thinking of a project, choose the genre of movie it will be: action, horror, sci-fi, comedy, documentary, etc.
Think of a story for the project. Don't be afraid of originality, but keep in mind any constraints. For example, if special effects will be needed, how can this be achieved with your budget if you cannot create them yourself?
Write the film in the form of a clear, easy-to-read script, and let your actors contribute too. Look at other film scripts to get an idea of how to construct your own.
Cast the film. Use friends, or possibly audition some drama students. Good acting is important in any film, so avoid using anyone you feel is unsuitable.
Have the actors dress rehearse several times to get into character. This is also a good opportunity to sort out "blocking" (an actor that's out of position).
When shooting begins, film the more difficult scenes first, and get them out of the way.
After shooting is finished, take the raw footage to a video editor or edit it yourself on your home computer.
Burn the completed film to a DVD, and share with friends.

[edit] Tips

Don't think a normal camera is waterproof. If filming in the rain have a plastic bag covering the camera, except over the lens.
If you don't have a clapboard, write the name or number of the scene and the number of the take on a piece of paper, or use a small white-board (the kind used for writing phone messages down). This enables you to put your scenes in order when you are editing them.
When you edit the project, match the right music to the right scenes. If necessary, use a sound effects CD.
If the film is a comedy, it'd be a plus to keep outtakes and include them in an outtake/blooper reel after the film.
If multiple scenes take place in the same place, film all those scenes while you're if that area unless you need different lighting in a scene.