Mac OS
Step One
Go to Apple Menu > Control Panels > Date & Time. Make sure that the Time Zone is set correctly for a major city in your Time Zone. Since this is a setting you must choose the first time you ever turn on your Mac, or at the first boot up following an OS install, odds are good it will still be correct. Check the date too: If the year reads 1956, you have a very old Mac and the clock battery is likely dead and needs to be replaced. Regardless, set the date correctly.
Step Two for Mac OS 8.5 or later:
Make sure the box marked "Use a Network Time Server" is checked. If it isn't, check it. Close the "Date & Time" Control Panel. Now you're done.
Step Two for earlier versions of Mac OS:
Close the "Date & Time" Control Panel. Get on the Internet and download NetChronometer from http://www.kezner.net/netchrono.html and run the Installer application. Reboot. Open the NetChronometer Control Panel and make sure "Use Internet Time Server" is checked and that the other settings are as you want them, and close the Control Panel. Now you're done. You will probably want to pay Jeremy his $7.
Mac OS X
10.2 "Jaguar" or earlier
Go to Apple Menu > System Preferences > Date & Time. Select the Network Time tab and make sure the service is running (or click Start if it isn't). Check Manually Configure and enter an NTP server in the box. (There is no list to pick from like in Mac OS. For a source of NTP servers, see below.) Close the window. Now you're done. Thanks to ccunning for his contribution.
10.3 "Panther" or later
Go to Apple Menu > System Preferences > Date & Time. Under the primary tab, with the rather redundant name "Date & Time", check the box at the top of the page next to "Set date & time automatically". You may optionally select the Apple time server closest to your geographical location, or manually enter the NTP server address of your choice in the drop down box/menu to the right. Could this be any easier? Probably not.
Useful Tips
martin points out that it's usually a good idea to choose a network time server that is geographically close - or few traceroute hops away from your own computer. And you know, he's right! I myself do not use Apple's own time server. martin adds that an accurate listing of network time servers can be found here:
http://www.eecis.udel.edu/~mills/ntp/servers.htm