OK, here's the best video I could find. It's about motorcycles, but It sort of helps.
NOTE:
IGNORE what he says about suspension. Just pay attention to the footage of the TIGHT, BINDING chain and the loose functioning chain. Now, the 1" to 1.25" slack he mentions is appropriate for a motorcycle,
but not a bicycle. A bike chain is much, much smaller, so the functional range is also smaller. I run my chain with about .25" (at the tightest section) to .75" of slack.
Pay particular attention to how he checks the chain, moves it along, then checks again. This is because chain tension changes because unfortunately the chainrings, chainring bolt holes, or cogs aren't perfectly round. Higher quality parts (Campy Record, Shimano Dura Ace, FSA) are closer to perfection. But, few are absolutely perfect.
http://www.youtube.com/watch?v=2ljRtU-pjTk
The way to adjust the chain tension in a bike is to move the rear wheel back and forth.
I stand behind the rear wheel, loosen the nuts then place my left hand between the downtube and the rear wheel effectively pushing it back. I then lock the drive-side (right) bolt with the wrench. Check the tension and adjust accordingly. Once it's right, lock the left nut. Then lock them both extra tough to avoid slippage. Then I lock my chain tensioner to keep my wheel from sliding forward during my super awesome sprints.