Now, let's begin...

1. Impostor has been developed using Sun's Java 2, Standard Edition (version 1.4). You have to have Sun's Java Runtime Environment (JRE) or the Software Development Kit (SDK) itself installed on your system. You need version 1.4.1 or later. You can download this from here. You have to make sure that you can run the jar, the java and the keytool commands from the command prompt. 
2. Now you need to download the Impostor JAR files. You can do this by following the "Download" link from the Impostor project web page. Although there are currently six JAR files in the project, you actually only need three of them: impostor.jar, impostor_daemon.jar and resources.jar.
3. Create a directory that will be the "home directory" for Impostor, e.g. /imp.
4. Unjar the files impostor.jar and resources.jar into the home directory. 
5. Create a subdirectory named impostor in the home directory, e.g. /imp/impostor.
6. Unjar the file impostor_daemon.jar into that subdirectory.
7. There are three text configuration files you need to edit in order to suit your requirements: users.imp, credentials.imp and substitutions.imp. The first two make up the user and credential database while the last one configures the content filtering component. Editing the files is straight forward and should be easy.
8. Now you need to create a cryptographic key pair for Impostor to use when setting up browser-side SSL/TLS connections. A simple way to do this is by typing the following command: keytool -genkey -keyalg RSA -keysize 1024 -keystore prvkey and choosing the word secret as the keystore and alias password when prompted. The resulting prvkey file must be placed in the Impostor home directory (e.g. /imp).

Done!

Assuming that the Impostor home directory is /imp, you can now start Impostor by typing java /imp/SimpleImpostor 8080. This will start the proxy daemon on port 8080 and will send log messages to the "standard output".