Hi there.
Clomid regimens actually vary a lot, depending on where you are, how your doctor prefers to do it, etc. But the basics are:
You take the clomid once a day for 5 days early in your cycle, the particular days range from CD2-6 up to CD5-9, depending on your doctor's preference. There's no real data on which days work better.
It's generally best to take it at night, at the same time each day, as this helps minimise side effects during the day. The main ones are hot flashes and headaches, but not everyone gets them.
Some doctors don't really monitor you, they might just do a blood test for progesterone to confirm ovulation on around day 21.
If you are being monitored, its usually a combination of blood tests for estrogen, LH and progesterone levels, and ultrasounds to check the number and size of your follicles. This can tell you very clearly when you are about to ovulate and confirm after it's happened. Monitoring is usually done to make sure you don't get too many follicles. Your doc may be okay with more than one depending on what else you are having done. Mine only wants one follicle each cycle because we are trying naturally, and she doesn't want to risk multiples, but it depends on your particular situation.
Basically you know it's working if your estrogen levels are increasing and you have 1 or more good sized follicles. If its not working you may not ovulate at all, which the blood tests will show. Generally they start you on a low dose (25 or 50mg) and then slowly increase it if that doesn't work. You can go up to about 150 or 200mg, but they start at the lowest dose to avoid multiple follicles. Once they find the dose that works they'll keep you on that until you either get pregnant or your doc wants you to stop and try something else. Usually they recommend only 6 cycles of clomid, maybe up to 9 if it takes a few to get the right dose. If it hasn't worked for you in that time it generally won't so you need to switch to something else.
I'm doing my second round of clomid right now with monitoring, its actually very reassuring to know what's going on, and see how the follicles are maturing. It means going in to the clinic every couple of days, but I don't mind that.
Hope this is helpful!