The following drawings show a ray-trace of the telescope with the path of the laser shown as a dashed red line. The ray-trace optics are shown grossly over tilted and miss-positioned so that you can see what should be happening to your telescope as you make adjustments. Also note that different systems are keyed to different colors. Purple represents the secondary, blue the primary, white the paper reinforcement ring. Yellow dashed lines show the path of a star's light entering the telescope and eventually reaching the eyepiece.
Collimation always begins with the eyepiece and ends at the primary. Because of this the first step is to make the focuser as square as possible with the tube. A premium focuser can be adjusted by turning allen screws that rest against the main tube. In this way the tilt can be easily changed. Some focusers will have to be shimmed to accomplish this goal. One method that works well as a first attempt is to remove the secondary and mark the tube directly opposite the focuser bore. Then with the laser installed the tilt can be adjusted until the red dot is over the mark. However the true test will be where on the laser strikes the secondary. The laser dot should appeared centered in the secondary from side to side and slightly toward the side closest to the focuser. As you can see below our first attempt to square up the focuser has the laser hitting the secondary, but front to back it is hitting a bit too close to focuser. By the way this procedure assumes that the secondary's spider has been centered in the tube, so that from side to side the secondary is also centered in the tube. The spider's center hole should be positioned slightly away from the focuser to allow "offset". This amount of offset is much debated but can be calculated using various formulas. If your system is faster than f/6 this should be considered. If the system is f/6 or slower the secondary can simply be centered both ways. When I build a Newtonian from scratch I try to drill the mounting holes for the spider so that the center has the correct offset without distorting the spider. Since the tilt of the secondary is wrong, the laser is reflecting off the secondary in the wrong direction.
Second, the tilt of the secondary should be corrected. Even though our first guess of focuser tilt and secondary position may not be quite right, the tilt of the secondary needs to be set so that we can further refine the secondary's position. In the drawing above the secondary is close to the correct position, but where it is "looking" is wrong. The paper ring (white) is not being hit by the laser. This tilt can usually be adjusted by turning three push-pull screws on the rear of the secondary assembly. On most telescopes this will also cause the secondary housing to move slightly from side to side so it may be necessary to re-adjust the side-to side position (or the tilt of the focuser) to keep the laser dot centered from side to side. As the three screws are turned the laser dot will appear to move in relation to the paper ring. Keep adjusting until the dot appears directly in the center of the paper ring. Note that the dot is still hitting the purple secondary too close to the focuser. The secondary is now tilted correctly, but its position is wrong and precious light would be lost if this were not corrected. In the diagram below the secondary must be moved forward in the tube as well as toward the focuser.
Third, the spider should be adjusted or the tilt of the focuser checked until the dot on the secondary is centered from side to side and just slightly away from the primary front to back (depending on the amount of offset). Then adjust the tilt again. This may cause the secondary to become un-centered once more, so repeat the procedure until the secondary is both centered and the laser dot is centered in the paper ring. The drawing below shows this. Once the laser is centered on the secondary (with offset) and in the center of the paper ring you are done with the secondary adjustments. This to me is the hardest part of the whole process.
Fourth, it is now time to adjust the tilt of the primary. This tilt is detected by observing the location of the laser reflection off the primary that we have been ignoring up until now. Since the paper ring has a hole in the center this gives the laser a sopt to reflect from. By turning the screws on the back of the primary's mirror cell the laser reflection from the primery will move. Some cells are spring loaded and this process is fairly easy. Simply turn one of the adjustment screws until the reflection comes as close as possible to the point where it reflects from the secondary, then proceed to a second screw. Turn the second screw until the reflection again comes as close as possible, then to the third screw. Turning the last screw should bring the laser reflection on top the one already on the secondary and therefore back into the laser source inside the focuser. If the reflection is still not quite folding back on itself then repeat the steps above by re-adjusting the three primary screws. Some mirror cells use a push-pull arrangement and have six screws on the back of the cell. One screw loosens, the other tightens. These are more difficult, but with a little practice the Cheshire reflection can be placed in its correct position. If all this is done correctly the view should look as shown below. The laser dot is centered on the secondary (with offset), centered in the paper ring and reflects back along this same path to the source. At this point the telescope should give very good images. Stars at the center of the eyepiece field should appear round and as they are defocused they stay concentric with their focused position. You have collimated a Newtonian!
As a final note observe that sometimes it is difficult to see the return reflection on the butt end of the laser. If your focuser is too deep or your main tube is too long, it may not be possible to view the end of the laser directly. This problem can be circumvented by looking into the primary and the reflection of the butt end inside the focuser will be visible. The above drawing shows why an offset is required for the secondary. Since the side of the secondary furthest from the eyepiece is closer to the primary than the side closest to the eyepiece, it intercepts the cone of light from the primary earlier when it is wider than when it intercepts the near side. If the system is faster than f/6 some of the light would be lost that comes from the far side of the primary. Images will still be good, but not as bright. The main objectives in order to have good images are to have the primary perpendicular and centered on the optical axis and the eyepiece centered and parallel to the optical axis as it is reflected from the primary by the secondary. The laser's light defines this axis visibly.