This exercise primarily targets your obliques but also works your abdominals.  As with all exercises, concentrate on contracting your abs and obliques throughout the exercise.

Starting Position:

Lie on your back, bend your knees and lift your legs so they are parallel to the ground.  Put your hands beside your ears where they are not able to grab and pull on your head.  They are to remain there throughout.

Conducting the Exercise

You can start with either side, but the general idea is to bring one elbow to the opposite knee as your legs move in a circular (bicycle) type motion.  So, using your abs and obliques, contract, and bring your right elbow to your left knee.  Your left leg is moving towards your elbow at this moment.  As your left leg begins to move away, twist and bring your left elbow to your right knee as it moves towards it.  Then just repeat the motion for the desired number of reps or time limit.

Tips

There really is no need to lift your shoulder high off the ground.  Just focus on contracting your obliques/abs as much as possible with each twisting crunch.  Biggest things to avoid are using your hands to attempt to pull your head and neck up and going too fast.  Slow deliberate movements that generate the tightest contraction will do you the most benefit.  You can increase the speed once you are in control of the exercise.  If you do not use your abs/obliques to conduct the exercise you will likely feel it in your neck as you strain your head to lift your shoulder.