I made my first batch of mulled wine last year for a Vivi Dot friends and family holiday party/trunk show. It was a huge hit and after making it again at this year's party it's now officially a tradition. You really can't beat the way it makes the whole house smell like the holidays and the recipe I use is especially tasty.
I tend to wing it a bit since I make an extra big batch. For instance if I triple the recipe I don't need to triple the oranges. I also suggest letting it sit for at least the 15 minutes the recipe describes. The longer it sits the better it gets. Just be sure to keep an eye on it once the wine is added so it doesn't get too hot, boil, and take the 'fun' out of it. Also, there's obviously no need to spend much money on the wine since you're adding water, sugar, etc, but if you're like me and want to avoid the instant two buck chuck hangover I'd step it up one notch and go with something in the 3-4 dollar range from Trader Joe's.
Here's the full recipe courtesy of the Food Network
2 cups water
1/2 cup sugar
4 cinnamon sticks
6 whole cloves
1 fresh whole nutmeg
2 oranges, thinly sliced
1 bottle red wine
Combine 2 cups of water with the sugar and spices in a saucepan and bring to a boil. Boil for 5 minutes. Add the orange slices, remove pan from the heat and let sit for 15 minutes. Stir in the wine. Reheat gently over low heat, never allowing to boil. Serve hot, in heated glasses.