^ Glen's method is close to mine. I don't generally worry about cam break-in as long as it has been coated in cam lube, unless it's a US-made cam. Seems the Toyota ones are made of better iron that doesn't shed its skin the first time it's used...or so I've heard.
First point, fill the cooling system with plain water, no antifreeze. That way if you have a leak, it makes a much smaller mess that's much easier to clean up and it doesn't spray delicious pet poison all over the place.
Make certain that your cam timing is correct, your valves are adjusted correctly, and that all vacuum lines are routed properly so that when it fires, it runs well as soon as possible. You can get the ignition timing very close without starting the engine. I prefer to crank the engine over with the coil wire removed to build oil pressure; if you have an oil pressure gauge, now is a good opportunity to make sure you have good oil pressure.
Once it fires, I like to blip the throttle right away and keep blipping it continually as it warms up. The point is to keep the rings under some load while keeping RPM reasonably low to avoid beating cold pistons around in the bore or grinding new bearings into pulp before things have expanded as they do at operating temp. I usually rev it to 2000 RPM or so, over and over until the thermostat opens. Then I let it idle down and double-check ignition timing. While the timing light is hooked up I also confirm that mechanical and vacuum advance (if equipped) are working correctly. Shut it down, check for leaks, check oil and coolant levels, check belt tension, make sure the oil filter is still tight.
Now it's test drive time. Grab the cellphone, toolbox, 4-way, flashlight, jumper cables, and AAA card. Just like Glen suggested, keep the RPM low enough not to shred the bearings. I think half of redline is a sensible rev limit for the first drive, so 3000 or so makes sense for an R-series engine. Just like the initial fire-up, I don't like to let it idle for too long. A nice half-hour drive around town (lots of stop signs or lights, lots of reasons to slow down and accelerate again) works really well to vary the engine speed and keep the engine working without revving it out. Keep the throttle open as much as you can to keep those rings expanded against the cylinders. This will also be an opportunity to learn about any carburetor tuning you need to do if it's not running 100% right. If you've done a lot of carb tuning and jetting you can often determine what it needs just by driving it around a while and narrowing down when it does what.
After you're confident that the engine is running well and not giving any indications of trouble, add some antifreeze and use it for your daily grind, but keep the RPM reasonable - maybe up the limit to 4000 after the first 250 miles. After a couple of hundred miles I drove mine from Redding (CA) to Eureka and back for a nice break-in run. Then at 500 miles, it's nice to change the oil and filter and once again, check the timing and valve clearance. After the first 500 miles, if everything sounds good and looks good, it's game on - as long as it's built right, kept full of oil and coolant, and fully warmed up, give 'er hell!
