The Nursing Process is a sequence of steps, quite similar to the scientific method, which allows a nurse to make correct decisions regarding the care her patients require.
The first step of the Nursing Process is assessment. Assessment includes the collection and organization of data, validation of the data collected, and documentation of the data. A nursing assessment may include biographic data, the patient's chief complaint, the history of the present illness, the patient's past medical history, a family history of illness, a lifestyle assessment, social and psychological data, as well as vital signs, signs and symptoms of illness, and a physical examination.
The second step of the Nursing Process is diagnosis. Diagnosing includes analyzing the data, identifying health problems, health risks, and the strengths the patient has, and formulating nursing diagnoses that take all of the above factors into account. The format of a nursing diagnosis (according to NANDA, the North American Nursing Diagnosis Association) is "problem related to what caused the problem as evidenced by whatever indicates that the problem exists"; i.e. Fluid Volume Deficit related to insufficient oral intake of fluids secondary to vomiting as evidenced by dry mucous membranes, poor skin turgor and decreased urine output, or Noncompliance (diabetic diet) related to denial of having disease as evidenced by client self-report and HbA1C of 8.2.
The third step of the Nursing Process is planning. Planning includes prioritizing the patient's problems and diagnoses, formulating goals and desired outcomes for the patient to meet, selecting nursing interventions to enable the patient to meet those goals, and writing the nursing orders. Goals and outcomes must be measurable. A generalized goal is acceptable if it is followed by specific desired outcomes, i.e. fluid balance will return to normal as evidenced by urinary output greater than 30 mL/hr, urine specific gravity 1.005, moist mucous membranesand good skin turgor. An appropriate goal for this patient would be to have 400 mL of net oral intake over 8 hours. Appropriate nursing orders would be to monitor the patient's intake and output, check skin turgor and mucous membranes every 8 hours, monitor patient's temperature every 4 hours, weigh the patient daily, instruct the patient regarding the amount, type and schedule of fluid intake, assess the patient's understanding of the fluid loss and teach accordingly, offer oral liquids every hour, and assess urine specific gravity every shift.
The fourth step of the Nursing Process is implementation. Implementation includes reassessing the client (to make sure the client's needs have not changed), determining the nurse's need for assistance, implementing the nursing orders (directly or through delegation and supervision), and documentation of nursing actions. When implementing nursing orders, it is important to explain to the patient what is being done and why, as well as what the patient can expect, and what the patient is expected to do. Documentation is very important, not only legally (as one of my professors says, "If it isn't written down, you didn't do it") but for the patient's safety. If there is no documentation that a treatment was performed or a medication given, it is possible that the patient may receive another treatment or dose of medication. Also, if the patient's condition changes, it is important that all assessments and procedures be available for the physician to review, so that the proper care may be given the patient.
The fifth step of the Nursing Process is evaluation. Evaluation includes collecting data related to the desired outcomes, comparing the data to see if the patient's goals or outcomes desired were met, relating the nursing actions to the goals and outcomes, evaluating the status of the problem, and continuing, modifying or terminating the patient care plan. For example, if the reassessment of the patient shows continued dehydration despite the nursing interventions performed, the plan must be changed (for example, the amount of oral intake could be increased or an order for an IV might be obtained).
The Nursing Process is a cycle which never ends. Assessment leads to diagnosis leads to planning leads to implementation leads to evaluation leads to assessment leads to diagnosis... As patient needs change, the Nursing Process allows the nurse to change the patient's plan of care to ensure that care is tailored to the patient's present needs. It is a systematic, rational method of identifying a patient's health care status as well as actual or potential health problems, to establish plans to meet the patient's identified needs, and to deliver specific nursing interventions that address those needs.
And you thought all nurses did was pass out pills, empty bedpans and apply band-aids...
If you desperately want to find out all the gory details of nursing diagnosis, setting outcomes and goals etc. I recommend you check out Fundamentals of Nursing: Concepts, Process and Practice by Kozier, Erb, Berman and Burke, published by Prentice Hall (comes with a really nifty study CD-ROM too...) | 
