Towing is a very dangerous operation. It is best left to professionals. But if you find yourself in a situation where you must be towed, or must tow someone else there are some things you need to know, and equipment you need. The first thing you need to do is put on lifejackets and insist that the people on the vessel being towed put on theirs. Have everyone move as far forward, away from the tow line on the towing boat, and on the towed boat they should move as far astern, away from the tow line as possible. Tow lines can snap like a giant rubber band. When they do they will fly violently toward the boat. This has the potential to cause severe bodily harm or death and can damage the boat as well. So when the line is under strain stay as far away from it as possible.
Your tow line needs to be as long as possible. On small boats even 100 feet may not be long enough. It also needs to be a large diameter. A 1/2 inch line may not be large enough. A 3/4 or 1 inch line is better for towing boats in the 20 to 30 foot range and should be much larger for boats longer than that. Do not use nylon line. Nylon will stretch, but when it reaches its maximum stretch it will snap and fly like a rubber band. Use Polypropylene. It floats and that helps to keep it out of your props. If the boat is too big to tow with your poly line then you should not even attempt to tow it.
You need to have something on the boat to secure the line to that will stand the strain without pulling out. My boat has two U Bolts on either side of the transom. They were put there for towing skiers, but they are through bolted and have backing plates so it would take a lot of force to pull them out. Most cleats and fittings on recreational boats are not strong enough. Cleats should be through bolted and have metal backing plates. Other wise they will just rip right out of the fiberglass or wood. The best method is a tow bridal that wraps around the boat and is fastened at at least three points, but most boaters don't have this. Most small power boats have a bow eye that has a backing plate. This is a good point to fasten the tow line to on the boat being towed. On sailboats you may need to use the mast to tie the tow line to, but only if it extends down to the keel. A mast that is stepped on the deck or cabin top, or in a pulpit will not take the strain.
As I said the tow line needs to be long enough that when you take up the slack the line still sags in the middle. This is called a catenary and allows the line to stretch without snapping. If the line is straight it will have no room to stretch. Along with this you need to go slow. Five miles per hour may be too fast. You need to keep a lot of slack in the line to be safe.
Start at a very slow speed, with the engine just idling over and take up the line, Have someone slowly paying out the line to keep it out of your props. Make sure you and the person helping have a large and very sharp knife. On big boats have an axe handy. This is to cut the line if things go bad. Make sure you don't get tangled up in the line.
As I said this is a very dangerous operation and should be left to a professional. I strongly suggest you read the links below. They explain in greater detail what is involved in towing.
http://www.boatsafe.com/nauticalknowhow/towtip.htm
http://www.wikihow.com/Tow-a-Boat
http://www.thefishingline.com/towinga.ht