First, remove the spring from the shock; it makes it alot easier.
I usually only fill up to about 2-3rds of the way, then bleed the shock by slowly compressing/extending the shock. Be careful when doing this to not extend the shock too fast; they can be used like a water pistol. Also, don't let the shock piston go outside of the oil.
Once you've bled the air from under the shock piston, fill the oil until you have it as close to level as you dare. Doesn't have to be perfect; you're going to be bleeding it further in a moment.
Now, if the shock has a rubber "bubble" looking thing under the cap, skip this step and lock the cap all the way on; you're done.
Next, thread on the cap finger tight, and then back it off about a quarter turn. Wrap the shock in a rag, 'cause it's gonna get messy. Next, compress the shock, and tighten the cap.
You should have a shock that will compress smoothly with moderate effort. Reinstall springs and install on the car.
When you feel the car has a suspension that feels all-spring (like a cheap radio shack toy car), thats' when you re add oil.