When you pick up the new color, the old color should be kind of "trapped" against the back of the work. This will loop the two colors together so you don't get holes at the color change.
Carry loosely across work: if for expample you knit four stitches with MC then four stitches with CC etc. the unused yarn is carried across the back and you'll get "strings" of unused yarn. The tension needs to be right otherwise you'll either pull the knitted fabric if you carry too tightly or have loose loops instead of strands if you carry too loosely.
If you can check out Silver's reindeer sweater in the finished objects post you can see a REALLY PROFESSIONAL example of stranding.
Silver and Ingrid are our resident experts on colorwork, so I know they'll correct me if I said anything wrong.
Happy Knitting :XX: :XX: