First, bend your knees outward, and turn both your arms toward each other and touch, while shouting FUSION!! drawing it out in the middle. Second, bend up your leg that is farthest away from the other person in the direction of that person and turn both of your arms in the opposite direction than they were turned.

Finally, bend toward the other person with the arm farthest from the other bent over your head, and the other arm under your head. Touch the index fingers of both hands directly head on, or it will mess up the fusion. Here is an animation of a perfect fusion.

The Potara Earrings were created by the Kaioshin. They are always fused. If you fuse with the earrings, you cannot separate, unless you are swallowed by a magical being, as in the case of Buu. If you are somehow separated, you can never fuse with the earrings again. The earings automatically fuse the people that wear them.