Then it looks like you're all set, you just need to partition your SD card (assuming you haven't already got it partitioned, see sicksand's post above on how to check for "secondary storage" in the settings).

You can use a PC to partition your SDCARD into two as sicksand mentioned above, or if you want to do it in your phone itself, you can do it if you have amon-ra's recovery image (if you have modaco most likely you will also have this recovery image):

* power off
* press home + power to switch power on
* A menu in green text will appear, this is the amon-ra recovery image.
* Scroll down with the trackball to "Part SD: fat32+ext2+swap" and press the trackball.
* Scroll up to "reboot system now" and press the trackball.

Done! First time you reboot, apps2sd should kick in and setup/move the second partition with your apps. You can then copy back your data into the SDcard.

Doing it on the PC gives you better control of the sizing, etc.