For myself, the learning process generally occurs in three steps.
First, I read the effect (or watch the video) in question over and over and over again. I read it with props in hand. I read it before going to bed. I read it at lunch. During this process, I find myself becoming more and more in-tune with what the creator had in mind, until I reach a point where I feel I have absorbed as much as possible from the text and can do the routine without having to refer to the book.
Next, I pull out my notebook, sit myself down in front of my mirror, and begin to experiment. (For those of you wondering, yes, these steps often occur so close together as to blend into one unit.) This is the time where I get my fingers fully attuned to the necessary motions, let my mind run over presentational possibilities and generally make the effect my own. I also take a lot of notes during this process, as Ive found that something that Ive thought up for one trick, which may turn out not to be as worthwhile as I initially thought, winds up being perfect for something else. By the time I feel Im ready to move on, I have the moves worked out, props built and script written.
Finally comes the rehearsal stage. As Eugene Burger has stated over and over again, rehearsal is just as important, if not more so, than the physical practice. This is where the words and actions really come together. The mirror gets placed aside, close friends are shown sneak previews, and I work and work until I no longer think about what Im saying or doing. It is at this point that it is ready to be shown to real live, paying people.
That is my general learning process, but I dont want to give the impression that it ends there. Obviously, once a new effect enters my repertoire it is subject to change and improvement. In fact, my best effects have come about after years of doing them for real people in all environments and situations, and having altered the script, handling, just about everything possible to make it as strong and entertaining as can be.
And just in case it seems like a lot of work, Id like to say: IT IS. But Dia Vernon said (and Im paraphrasing here, Im nowhere near my library at the moment), that if you dont enjoy practice, if you dont get a thrill out of making something as perfect as you possibly can, perhaps magic isnt for you.