Tools
As you probably know different people sculpt the same sort of things with different equipment so sculpting style/technique can adjust to accommodate different tools to some extent - try different types of tool to see what works best for you.
The easiest and simplest tools you can use to sculpt with are cocktail sticks sanded to shape and coated with superglue, which you then buff and polish - bearing in mind a simple rule: the smoother the surface of the tool the smoother the putty will be. For a few years these are all I used for some pretty basic sculpting, along with a couple of X-Acto blades for trimming and one or two needles. A long sharpie, a blunter sharpie, a flat wedge (sort of like a screwdriver) and a rounded tip are the shapes I found I used the most, although I tried a bunch of others - that\'s one of the advantages of these, they\'re easy, quick and cheap to make so if you need a new one for whatever reason (they can break if you press too hard for example) you can make it on the spot before a single batch of putty has set!
If you\'re a real neat freak you can coat the entire stick with superglue instead of just the tip, that way you don\'t get a gummy area where you handle it and they look dead slick and professional
I have two steel sculpting tools that I bought on spec some years back at a show and after refining their ends (they were much too crude for fine work) I\'ve slowly found I use them for most of my sculpting. Dentists\' tools are worth considering as are steel wax-sculpting tools that look similar - these are available in sets on eBay pretty regularly for superb prices (like 12-15 pieces for $20 or something like that) so if you\'re okay using eBay that\'s the price to use as a benchmark*.
You could also make your own tools from brass or bronze rod, some of my friends have made these and they are soft enough to shape fairly easily but tough enough to last indefinitely for our purposes. You can set the rod into an old brush handle or wooden dowel to give a better grip if you find you prefer to hold your tools this way instead of just with your fingers as you would with a needle or cocktail stick.
*I just did a quick search, here are some options:
http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&category=303&item=4381706711&rd=1&ssPageName=WDVW
http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&category=303&item=4374036362&rd=1&ssPageName=WD1V
http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&category=28124&item=8193749246&rd=1
http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&category=83892&item=8193749218&rd=1
http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&category=2594&item=5976116256&rd=1
Putty
Kneadatite/Duro/Green stuff is a very good putty for work in small scales. You might also like to try MagicSculp and Apoxie, which is available in a couple of different consistencies. Kneadatite is very tolerant of various proportions of resin and hardener, in general I like to blend it about 60/40 or 70/30 yellow to blue - makes it slightly less tacky and easier to work with for me. If I want it softer I will blend it with another putty.
Jambot mentions you can blend greenstuff with Milliput, you also try MagicSculp, A+B, Fimo, Sculpey and other things all of which will give different feels, hardness and drying time.
Techniques
I like to use saliva a lubricant - no cracks wiseacres

You can also try hand creams, moisturisers, cooking oil (don\'t use linseed oil if you happen to have any) and petroleum jelly. If you use any of these be sure to wash the work before you prime of course.
Originally posted by Jambot13
The breakthrough advice was to use the Greenstuff in various stages of going off. Don’t try and use it the second you’ve mixed it, it’s often far too malleable and sticky. Wait until the consistency of the Greenstuff suits the job at hand.
This is cornerstone advice for any sculpting material that sets which will transition from one consistency to another - some things can only be achieved when the putty is very nearly set and will take a nice sharp mark without moving too much. Play around with it and you\'ll soon see what it\'s like - from soft and workable where you can blend different blobs together into a single area, to a waxy hardness for sharp scratches and final refinements of details.
Einion