We talked to DD1 about the baby, and read books on the subject of new babies and being a big sister. Two of our friends recently had babies so she was able to be around them. We started talking way more about the baby about two weeks before she was actually born, about how mommy & daddy were going to the hospital to get her baby sister. When my mom brought her to visit after the baby was born, DH was holding the baby so I could greet her myself. We tried to make her feel special, saying things like "your sister wants to meet you," etc., and didn't pressure her to do anything like hold the baby if she didn't want to (and she didn't). The baby had a present for her, and she brought a stuffed animal for the baby.
Now that baby sister is here, DD1 likes to help. She gets diapers and helps with her bath and likes to pick out her sister's clothes for the day. She still doesn't like to hold her but she does a lot of cute things, like kiss her hands and feet, when she thinks I'm not looking. We look at pictures of DD1 when she was a baby, play silly games like where's the baby's nose/where's your nose, and do things while I'm nursing like puzzles or read books, but mostly she just plays with her toys by herself for a while. I also try to sympathize when the baby is screaming and I can tell DD1 is getting annoyed (although most of the time she just says "Oh no, baby Mariah's crying! Make her happy!"). Making sure we get to our weekly play group or the park at least, seems to help as well!!
That said...we do watch a lot of movies especially in the afternoon/evening when DD2 gets fussy, and DD1 just HAD to sleep in our room with us and the baby for the first week, and she's a humongous brat some days. It's slowly getting easier though.