What steps do I take to prepare a plaster block?
The first thing to bear in mind is that different grades of plaster have different properties. They can broadly be divided into (harder) alpha plasters and (softer) beta plasters. Obviously for carving there is a compromise between how easy it will be to work and how strong the finished article will be. A softer plaster will obviously be easier to carve but a harder one will allow you to create finer detail and be stronger overall. 

there is also a large rage of specific formulations in between hard and soft. Specifically Herculite may be a good compromise for carving. 

It is important to use the correct ratio of water  to plaster, follow the manufacturers instructions and take the time to measure out the quantities accurately.  You can also get various polymer additives which strengthen the plaster further. 

Be aware that mixing even quite small quantities of plaster can be a messy business. It's not especially hazardous, but as with any fine dust avoid breathing it in too much and prolonged exposure can dry out your skin a bit. 

It is a good idea to keep a bucket of water handy for washing utensils as plaster in an excellent way to block a sink. Rubber mixing bowls can easily be cleaned by knocking the plaster out, rigid containers are much harder to clean. 

If you sieve the plaster before you mix it that will help to prevent any lumps in the mix. It's usually easiest to mix moderate quantities by hand as this allows you to feel any lumps, wear rubber gloves if you wish. Hand mixing also tends to introduce less air. Make sure that your mixing bowl is thoroughly clean, any traces of set plaster in the mix can cause lumps and hard spots in your casting. 

It is probably best to mix it in a separate container from  the one you mould it in as you will get a neater mould. Try to make up the correct amount as pouring a new batch onto setting plaster can cause problems. Once the mould is poured and before it sets gentry tap it a few times to help release any bubbles. 

If you want to colour the plaster it's usually best to colour the water with a water soluble dye or pigment before you mix it, if you want to obtain an even colour. 

As well as casting into a mould you can let the plaster set a bit and then mould it by hand like clay. A few minutes after mixing it goes from a fluid to something a bit like soft cheese. At this point it will hold a shape reasonably well and can be formed into shapes without needing a mould. You do need to work quickly as you will only have a few minutes before it sets.