The Naval Method uses body circumference, height and weight to estimate body fat percentage. It isn't the most accurate method available, but it is reasonably accurate and it is simple to use. To estimate your body fat percentage you take 2 measurements (if you are a man) and 3 (if you are a woman). The measurements are:

• Neck

• Waist (at naval)

• Hips (women only)

• Weight

You then plug the data into the calculator to get an estimate of your body fat percentage. From my own experience and from what I read on various fitness forums, it appears that this method tends to over estimate body fat. Don't be surprised if your body fat measures lower when using skinfold techniques. Whatever method you use, the importance of the estimation is not dead-on accuracy, but measuring your progress. If your body fat percentage is a little differnet than the calculation, that's OK. What is important is seeing the change over time. If you are the math type, here are the formulas used:

For males, the formula is:
% body fat = 86.010 x log10(abdomen - neck) - 70.041 x log10(height) + 36.76,
and for females, the formula is
% body fat = 163.205 x log10(waist + hip - neck) - 97.684 x log10(height) - 78.387.

Specifics from the military on applying this method and charts for analyzing results can be found here:
http://usmilitary.about.com/od/theorderlyroom/a/bodyfat.htm