Standby databases may be set up in two ways.
1. Physical
2. Logical
The characteristics and pros n cons can be discussed in parallel with setup details.
Physical Standby :- Its a physical copy of the primary database. Till 10g the physical standby is kept open in "mount" mode so of actually no use other then a disaster recovery. But 11g onwards the physical standby database can also be used for queries and reporting as the open mode for the standby database can be "read_only".
For creating standby using RMAN, below can be the steps.
( Primary database is ORCL and standby is STANDBY in below example which is the db_unique_name for them, while ORACLE_SID and the DB_NAME is same i.e.ORCL)