The Book of Shadows is a combination cookbook and journal. In it you record your magical workings, the ingredients and methods you used, and how it worked. In this way you are able to learn from your magical experiences and build upon the successes you have. Over the course of time you add various information you acquire from other people, books, magazines, coven work and other sources and the book becomes a valuable reference. How elaborate you want to get with it is up to your taste and the amount of time you want to spend. It can be a spiral notebook, or an embossed calf hide bound collection of caligraphy on parchment, it's up to you. One way to go is to purchase a blank book at the stationers, draw a pentagram on it, and start writing.
Traditionally the Book of Shadows or Grimoire was the record of magical workings of a witch, coven or wizard which would eventually be passed down to an apprentice or younger coven member when the writer retired or died. Code was often used and the older books are notorious for the details that were omitted in the writing. It was often impossible to recreate the results based solely on what was writen, one must have a certain level of knowledge in order to fill in the blanks. This may have served it's purpose when magic was a secret known only to a few, but it no longer does. It pays to be thorough in writing your book so that you, or someone you allow to use it, can replicate the results if need be at a future date. What good does it do to create the most fabulous smelling incense for prosperity, that draws business to your shop like bees to honeysuckle, if you can't make more when you run out?
Be as organized as you want to be, set up the book in any way you like, write as often or as rarely as you see fit, but I do recommend that you write. Bare essentials if need be, or full detail, later you will find you use it. Write what you learn from others, write what you try yourself, write things you see in books, it will all come in handy at some point. You may decide that you don't want a physical book, keep your writings on your hard drive if you prefer. Save a copy of that great incantation you saw on that webpage into your cyber Book of Shadows, whatever works for you. The book, or file, will be as useful as you allow it to be.
There are a number of Books of Shadows online that you might be interested in looking at for the ideas they contain. The C version of Gerald Gardners BOS is available at Sacred Texts as a text document. They have a number of other materials that you may be interested in as well, Aradia the Gospel of the Witches, The Golden Bough, and the Key of Solomon. The Internet Book of Shadows is a collection of material from the BBS days of the internet and includes a number of rituals, articles on various subjects and spells with which to augment your BOS. It is available at Internet Book of Shadows. Material from Janet and Stewart Farrar's BOS is available on Janet's website at Book of Shadows. There is information on the basics of Wicca, seasonal rituals and other information. A great resource for mythology, ritual and other interesting material is the Biblioteca Arcana. The Alexandrian BOS is online at Alexandrian BOS. Take advantage of some of these resources to add to your BOS, there's something for everyone.
Internet mail lists are another good source of material to add to your BOS. There are a huge number of them out there. Try Yahoogroups and Topica the two major email group providers. Search for Wicca, Spells, Witchcraft and similar terms to find groups that will be useful. Also, check your favorite witchy website, many have their own mailing lists available. Materials on these lists may be used to build your BOS. You can find poetry, chants, incantations, spells, recipes and the like. This is a good place to trade information with other witches as well.
Another useful resource for materials for your BOS is the Online BOS category at the Open Directory Project. There are 300 plus sites listed there by the hardworking Editors, of which your own Lady Galadriel is one. We look at all the sites and write descriptions of what they have available. The Online BOS Category is here. You can find a wide variety of material, spells, seasonal rituals, discussions of ethics, poetry, chants and songs, nearly anything you might need for your BOS. Browse around through the links and check out the ones that sound interesting to you.