When Billy was accepted to Dallas Theological Seminary, they sent him a book by Howard Hendricks entitled Living by the Book. I looked through it and thought it looked like something I'd like to read, but it wasn't until nearly 2 years later when I finally got started with it.
Not long ago, our church decided to encourage the body to spiritual growth in Bible study using the methods outlined in that book. They printed a booklet with one scripture reading from each of the 39 books of the Old Testament, complete with space for writing in observation, interpretation, and application for each reading. Since I'm not a part of any Bible study group right now, and my own personal study of Romans was almost finished, I decided to make that my next study.
When I began, I realized I couldn't really remember what I needed to do for observation, interpretation, and application, so I found Living by the Book on one of the shelves in Billy's study and went through it again. I skimmed the chapters and jotted notes on what I needed to do and look for as I read. I made lists of outside resources to consult, many of them in Billy's personal library. I copied an inventory of personal questions to consider when looking at scripture and how it can affect our lives. Finally, I was ready to begin the study.
Typically I take one week for each passage. The first day, I mark the text, which I've printed from the computer so I can jot notes and questions and answers. I also read the verses immediately before and after to put the passage in the correct context. Then I fill in the observation portion of my booklet. Days two and three are for interpretation. I reread the passage in another translation, usually the Amplified Version. Then I consult a commentary and a Bible handbook to find answers to questions I've come up with. I also look at an atlas to see where things took place. Then I read over my notes and write in the interpretation part of my booklet. The last day or two, I take time for personal reflection. Sometimes I don't get it the first day and I need time during the rest of the day to meditate on what I've learned. If it does take two days, I'll reread everything I've written for that passage and maybe go back to the commentary. After a little more thought, I realize what I need to work on in the application portion.
So far I've finished Genesis through Numbers. Tomorrow I'll start Deuteronomy. (No, I'm not on a M-F schedule. Some mornings I don't get my Bible study done...) I'd like to post some of my observation, interpretation, and application for the passages I've read. Maybe something I've found will help you like it's helping me.