Active listening is very different from hearing. This difference is as big as the difference between sitting down and listening carefully to a new album, and writing an essay with the radio on in the background. Proper listening involves actively trying to understand what the other person is saying and feeling.
An active listener tries to understand the speaker's message and feelings attached to that message. Practically, this means being mostly silent, making appropriate eye contact, adopting an 'open' body posture, and encouraging the person talking to elaborate on their comments where necessary. To encourage the person talking to continue, and to ensure that they are being understood properly, the listener occasionally (at natural breaks) rephrases the speaker's message and checks for verification or clarification. It is important to feed back only what the listener feels the sender's message meant, nothing more, nothing less. By listening and empathizing instead of offering advice and judgement, the listener creates an atmosphere of acceptance and understanding. Resist the temptation to offer advice - it is inappropriate and dis-empowering.
To listen actively and to understand is not a passive or simple activity. The following are important characteristics of a "good listener":
Be present in heart, mind and spirit with the person. You need to hear what he/she has to say. Make sure you are in an open and patient frame of mind.
Do not Judge
Accept the speaker as she/he is without judgment, reservation, or categories. Try to find a point of empathy, and to imagine you were in that person's "shoes".
Trust the person's ability to handle his/her own feelings, work through them, and find solutions to his/her own problems.
Accept the person's feelings, whatever they may be or however they may differ from your feelings or from what you think a person "should" feel. Remember that feelings change, and emotions such as despair or anger can fade.
Do not plan what you are going to say. Do not think of how you can interrupt or redirect the conversation. Do not think of how to solve the problem, how to admonish, how to console, what the person "should" do etc. Just listen. You only need to speak enough to ensure that you are understanding the speaker correctly.
Stay With The Other Person
Try to understand the speaker at his/her point of reference. Stay separate enough to be objective but involved enough to help.
Retain your "Independence"
Whilst you should empathize with the speaker's situation, you do not need to shoulder their problems. This would be draining for you and disempowering for the speaker. If you over-identify - you give the speaker the message that you do not trust them to be able to solve their own problems and that you will take over. Retain your objectivity.