It's pretty easy to make homemade yogurt. Use 2% or whole milk. I've never tried 1% or skim, but I hear that it is not as creamy and delicious.
Pour your desired amount of milk into an appropriately sized saucepan. Bring it to a boil over medium to high heat, stirring constantly so it doesn't stick to the bottom. Remove from the heat. While it is cooling, stir 2 1/2 tablespoons of store-bought or homemade yogurt (make sure it has live cultures) in a bowl until smooth. When the milk has cooled to about 110 F, pour it into the bowl with the yogurt. Place it in a warm place for at least ten hours or overnight. (The ideal temperature for the bacteria is 90-110 F, so you might consider putting it in a warm oven or over the pilot light of your oven if you have one.) In the morning, you'll have really good homemade yogurt. It will probably be thinner than store-bought yogurt. You can strain it for a few hours in cheesecloth to make it thicker. It will yield approximately the same volume of yogurt as of milk you put in.