Blisters are the bane of runners' and hikers' existence. They form by initially developing a tender red "hot spot," which will eventually become a blister. If you don't stop and deal with the problem then, it will rupture and the tender skin beneath will be rubbed raw. Such a seemingly minor spot of skin irritation can be incredibly painful and will bring your run to a halt.
The best way to avoid blisters is to have shoes that fit properly, allowing about a thumb's width of extra space in the toe box. Wearing new running shoes around the office for a few days can break them in and make them less likely to cause blisters when you hit the track or trail.
Sometimes, a blister starts to form no matter what kind of shoes you're wearing. The solution is to protect the blistering area with moleskin or duct tape -- in a pinch, any kind of makeshift barrier will work for a little while. You can also reduce friction with petroleum jelly or special runner's balms.
Once you have a blister, pierce it with a sterile needle, then keep it covered and clean. A dab of antibacterial ointment should help the healing process.