First, I started out with getting a small amount of spackling. When you have little holes like nail holes or my hole you're about to see, this is what you'll use. When you have a bigger problem, or you replace drywall, you should use drywall mud or joint compound.
* A Helpful Hint* Whenever you have a color on the wall and you need to touch up, or you want to use it in a different room,and you don't know the color name, you can take a little chip off the wall and most paint department can color match it for you! (If you don't already have a hole, try getting a piece behind the light switch!) I used a little sample for touch up paint.
HERE is my horrid wall boo-boo! It was about a foot long! Before you start, just wipe the surface off with a dry rag to get off any dirt or dust, it will help the spackling stick better.
Next, use a putty knife and start smearing it on the hole!
Try to keep it as even as possible, but you will smooth it out later with sandpaper.
Let that dry the recommended time, mine sat for about 3 hours, just to be on the safe side because it has been SO HUMID here in Alabama!
After it completely dries, take a very fine sandpaper (about a 220 grit) and lightly sand the patched area, just enough to even it out with the wall and get out all the lumps. Don't be nervous about over sanding, though, you can always put on more spackling!
After you smooth it out with the sandpaper, take a damp cloth or damp paper towel and wipe off the dust from where you sanded. This is important! You don't want powder mixed in your paint!
Finally, get out the touch up paint (make sure it's mixed up well before you start). *Use a paint brush for this!* Not a roller! Use the paint brush to feather out the edges, that way you won't have a huge block of 'new paint' on the wall for everyone to point out! I used a small artist brush because my spots were smaller than a standard paint brush.
Don't decide your paint isn't going to match until you've let it dry overnight! Sometimes it will take that long for paint to cure and start to blend in better.
Now you can't even tell I murdered my wall with a chair! :)