The first time you prepare bedding for your worms, you can shred newspaper to create a 8 to 10 inch layer. Lightly cover the paper with a thin layer of sand or garden soil, mix in with the paper, then use a spray bottle to dampen the bedding. You want it barely damp, but not wet. Put your worms in the bin and give them some time to burrow down - about 30 minutes. Sprinkle the bedding with chopped up food scraps and place a piece of cardboard loosely on the surface. The cardboard seems to encourage the worms back up to the surface to eat the scraps (and the cardboard.) Replace the lid on the container and give your worms at least a week to settle in before you start peeking in on them constantly to see if they've multiplied yet.
This is the finished product - compost ready to put in the garden and even more worms ready to go back to work in the bin. Various methods are used to separate out the worms. Although they will often clump together near the bottom of the bin, I generally put on a pair of gloves and gently spread the bin contents out on several layers of newspaper. When I've separated as many worms as possible, I put them back into the bin and the process starts all over again.