how to setup terminal services and thin client

How far have you got so far?

Do you have the Windows server installed?
Do you have the client(s) installed?
Can the clients talk to the server?

Configuring Terminal Services itself is relatively simple.

1.
 Click Start, click Control Panel, and then double-click Add or Remove Programs.
 
2.
 Click Add/Remove Windows Components.
 
3.
 In the dialog box, select Terminal Server.
 
4.
 Follow the instructions in the Windows Components Wizard.
 

The clients connect to it using either the Terminal Services client or Remote Desktop client.  They're pretty much the same thing,  they're just named differently according to what version you have and what OS the client is running.

Yes, server and clients are able to talk with eacth other. But I am suppoed to setup a thin client. I beleive this means that the client pc cannot have a hard drive. How can I  enable the  pc with no hard drive access terminal services on the server?  All I know is that I have to use the NIC of the think client to boot. But how does it establish a connection between the thin client and server? How do I make this happen?

thanks.

It depends on what you mean by thin client.  Usually a thin client has a basic operating system that can connect to a server running (in the case of Windows) Terminal Services.  
A "dumb terminal" has no hard disk at all so it needs to download an operating system from a server.  This is not something terminal services can do.

I would suggest confirming exactly what services you need to configure because if you need to boot from the network card, it's more than just Terminal Services.

Yes, thats exactly what I am trying to do. I need to run the server operating system from a dumb terminal by booting from the network card as you said. Can you please tell me how I can do this?