The dealer chooses a game (deal is passed after each game, clockwise), and deals.
The choice of games should exclude games that rely on betting to work, as Strip Poker is not a betting game. Guts, Sweep, Seven Card Stud, Seven Card No Peek, 3-5-7, and variants are examples of betting games best avoided in a hand of Strip Poker. Two or None, Five Card Draw, Low Ball and similar one or no draw games are good Strip Poker games.
In it's simplest form, either the player with the lowest hand must remove one article of clothing, or all players except the highest hand must remove an article of clothing (depending on how fast your group of players wants the game to progress).
In this form, the game is played until only one player has clothes left (and is therefore the winner or looser as the case may be). Players who have lost all their clothes generally are required to remain nude until the game has finished, leaving only one winner.
As an optional rule, to insure fairness, have all players begin with the same number of articles. Five is generally a good number, counting pairs of shoes, or socks as one article.
In this fun variant, losing all of one's clothes doesn't mean you can't keep participating in the game. This is a game which doesn't necessarily have a set winner, as play can continue even after everyone has lost all of their clothing.
Once a person has lost all clothing, they continue playing their hands as normal. Whenever a totally nude player is required to lose an article of clothing, they instead subject themselves to a Truth or a Dare, administered by the player with the highest hand that round.
Traditionally, in Truth or Dare, the person performing the Dare, or answering the Truth gets to choose between Truth or Dare. You'll likely find a lot of players sticking to Truth if you go about it that way, though. One solution to this is not allowing players to choose the same option more than twice in a row (usually, but not always resulting in a truth-truth-dare-truth-truth-dare pattern) Another option is to shift the choice to the person doing the asking or daring (the winner of the hand).
Truth: A person owing a truth is asked a question by the winner of the hand, and is expected to answer truthfully. These questions are usually sexual in nature, but don't have to be, they are sometimes embarrassing, but in the spirit of the game, the loser should try to answer as truthfully (if not as completely) as possible.
Dare: As Truths, the winner administers these to whoever has no clothes, and is required by the game to remove something. Instead of a question, the player is asked (dared) to perform some action.
There may be times when a player will refuse to answer a question, or do a Dare (spoil-sports!). For these situations, have an alternate punishment for failing to live up to the Dare. If you and your friends are drinking, a shot of tequila can serve as punishment, and might loosen up that prudish player! If not, think of something all players agree on before hand.
Other possible punishments:
Jumping Jacks - Faced with a consequence of doing this nude in front of everyone may make the dare seem more appealing.
Frosty - The uncooperative player's underwear goes in the freezer for a while, and they have to wear them for a round after they come out.
It is very important that all players understand and agree to all the rules of Strip Poker before play begins. Anyone not willing to follow through on rules established before the game began should not be playing! Nobody likes a spoil-sport, and people should not be forced or pressured into doing something they don't want to do. Avoid these problems by making everything clear from the get-go. If someone does chicken out, let them, and just don't invite that person to play in your next game.