Helpful walkthrough for setting up Gmail to send email as a custom vanity domain. It assumes that youremail at yourdomain is already pointing to your Gmail account.
http://youtu.be/V6tdoRPrmFA
Update – 18/09/2014
Google announced in 2012 that they would no longer be providing free Google Apps accounts. Existing users can still continue to use the service. However, if you’re looking to setup a new domain with Google Apps, you’ll need to sign up for the premium offering, Google Apps for Business.