1. What is the intended audience? This is important because it will tell you the level of details you need to add to your document.
2. What is the topic? Technical vs. non-technical. If it is technical, be prepared to incorporate graphs, pictures, drawings, and equations (whichever applies). If not, then an ordinary word processor will suffice. Notice I said "an ordinary word processor", that's what I think of MS Word. For a technical document, you may want to consider LaTeX (open source), XFIG for drawing figures.
3. Create an outline of what you want to write about: Title, Introduction, Problem Formulation, Analysis, Results, Conclusions.
4. For each of the above sections, break it up into sub-sections (as detailed as possible). You may want to enumerate things that you want to say. Add references where possible. Then fill in with diagrams, equations, etc.
5. Start filling in the sections. Can do multi-tasking here, no need to go in order.
6. Once you're done, write abstract and conclusions.
7. Read and correct as many times as you need until you're comfortable.
8. Give it to a colleague for his/her opinion.
9. Pray that it gets published or gets you the grade you need.