Taking a train in India

There are few things to take in to consideration:

Selecting the train
I strongly recommend that you get a hold of a copy of a booklet "Trains at a glance". It costs 35 rupees and is a great way to save a lot of money for not having to pay to a travel agent. You have to get the train number and station names from that book and although the information might be available elsewhere, this is by far the most convenient way. Available widely on the newsagents around train stations.

Booking a ticket
For trains leaving on the same day, contact the ticket office at the station. For future bookings there is usually a reservations office somewhere outside the train station.

First, get a piece of paper from the inquiry desk that is needed to make a booking. These are usually quite easy to find as they are required for all bookings. You need to fill the form beforehand with the date, train number, train name, arrival- and departure stations, class you are traveling in and also your home address. 2nd class sleeper is my recommendation for overnight trains as 3rd class might be a bit too rough and 1st class or 2nd class AC usually cost at least the double.

When you have filled out the form, there is most likely a swarm of locals surrounding the ticket booth and only thing separating it from a Slayer concert is the lack of loud music and a mosh-pit. So fight your way through to the ticket booth and pay up. At larger stations there are booths for "foreign tourists and freedom fighters" and there you might stumble upon a western-style queue.

If you are lucky you will get a confirmed seat but odds are that you will be placed on a waiting list for a seat.

Departure
If you have been put on a waiting list, the first thing to do is to check the printouts at the train platform. There you can see if you actually got a place on the train or not. Just look for your name or waiting list number and if there is a seat listed for you, you are all set to go.

If, on the other hand, you haven't got a place on the train you can't really do much about it than go to the ticket or reservations office and ask for a refund. Bribing the conductor was also suggested indirectly because somehow there usually are places that "can be arranged".

On the train
Thirsty? Hungry? No problem. The chai- and samosa-wallahs are constantly on the move and on every station there is a horde of people banging in to the cart selling chips, lassis, chai, chips, cookies, fresh fruit, packed lunches etc. There is also a possibility to order meals from the train staff (they will come asking for dinner/lunch/breafkast orders) but those vary greatly in quality. Price is quite cheap though, around 40Rs for a meal. Expect to pay 4-5Rs for a chai and 15Rs for a bottle of water. The difference isn't that great to the goods sold on the stands and some of the best chais I have had were on the train.

Quotas
There is a normal quota from which the locals and travel agents book their seats. There are also quotas for tourists and for emergencies. Tourist quota can be accessed from the tourist ticket office and tickets from the emergency quota can be bought on the same day, 4 hours before the departure. (My guess is that they print the lists then and if no one wants to pay the 200Rs or so extra you have to pay for the emergency quota, then they will give the remaining seats to the people on the waiting list).

In other words, we will continue the journey south tomorrow after paying for seats in the emergency quota. The rise of the cost on airfare tickets and the economic downturn has increased Indian Rails' ticket sales substantially and therefore the trains seem to be quite full (empiric observation backed by some statistics in local newspapers). The trains might be fully booked weeks beforehand so careful planning beforehand is recommended but most certainly not practiced.