You insert the following line in your ~/.bash_profile (or in some distros, ~/.bashrc):
PS1 is the prompt environment variable. \u is the code for username. \h is the code for the hostname. \w is your current working directory. \$ is your prompt character. The '@' and the space after \$ will appear literally.
I usually insert the newline code, \n, because I like to have the prompt on a separate line than my commands. ie. PS1='\u@\h:\w\n\$ '
You can also set PS1 manually from the command prompt, but you have to do this everytime you log into a console shell.