This is the tradional Indian method of making basmati. It comes out very light, fluffy and aromatic, with separate grains.
To get the basmati to come out right, it needs to be pre-soaked in warm water, and then steamed. I use a large, 2 level steamer I found in an Asian grocery. The rice sits in a covered glass or other bowl in the steamer while it cooks.
Proportion of Water to Rice - about 2 to 1
About 1/2 tsp salt per cup of dry rice.
Rinse the rice in a couple of changes of water, until the rinsing water is mostly clear. Combine the rice with the measured amount of warm water, and let soak for 45 minutes to a few hours. Before cooking, drain off and keep the water, and let the rice air out in a strainer for 10-15 minutes.
Heat the water in your steamer. Put the rice and soaking water, with salt and a pat of butter, in a covered cooking dish to go in the steamer - I use a covered pyrex bowl. Place the rice in the steamer, cover, and cook for between 45 minutes and an hour. I keep the flame on the steamer at medium to low.
If the rice is done early, you can turn the heat down very low on the steamer and let it sit for a couple of hours without losing quality.