Make sure you have a new gasket kit ready, you will need it.
After you remove the plastic outer cover and have disconnected the two electrical connectors, use a wrench to loosen the O2 sensor while it is still attached to the engine block (like you would a sparkplug). Once you have loosened it a quarter turn or so, then remove the sensor housing, along with the attached sensor from the engine block. Be careful not to lose the O2 sensor draw tube which will be resting in the engine block and may get pulled out when you remove the sensor case.
Once you have removed the metal sensor housing, unscrew and remove the sensor itself.
If it is really gunked up, I would carefully use a small screwdriver to scrape, gouge, etc.. the majority of the built up carbon off before soaking the end of the sensor in some sort of cleaner, being careful not to get any of the loose carbon chunks in the holes on the sensor itself. Then soak as stated above to help soften up the rest of the carbon and clean it as best you can.
Make sure you also clean the sensor draw tube, again use a screwdriver to scrape off all the excess carbon. Twist a small drill bit by hand through the center of the draw tube to remove the built up carbon there. Start small and increase the bit size as you go.
Also look at the metal sensor housing itself, you will probably find a lot of excess carbon in there as well.. same routine, carefully scrape as much as you can away, then soak and repeat to get things as clean as possible.
Scrape off the old gasket, replace it with a new one and then re-install the same way you took it off.. hand tighten the sensor into the metal housing, then mount the metal housing on the engine block (don't forget draw tube) and tighten up the sensor in the housing. Re-install the plastic cover, re-connect the two electrical connectors, etc..
EDIT: Just looked at the BBCboard forum post. Check your engine parts diagram to see whether you have a metal and rubber o-ring around the draw tube. My engine does not have those. Also, you don't need the fancy cut out socket to remove.. You can use a 22mm wrench, but I find that a pair of adjustable pliers works best (not vice grips).
-- Tom