You'll need at least a 10 gallon tank for the breeding, though larger is recommended. Make sure you have everything set up before letting them breed - even if he has a nest set up. Sponge filters - bought or homemade - are essential to keep it clean while not losing fry!
You also want some floating plants or ornaments that the male can choose to put the nest on. Sometimes they'll just put it in the corner, but my males have actually gone for a disposable cup (not a clear one) cut in half and rested on the water like a cave. Styrofoam white cups are what I use. They float well, but he still may prefer a more natural area like a floating plant or tall plant that breaks the surface.
If he's showing off, that's good, as long as he doesn't puff his gills out. If she isn't watching him like she's impessed, though, she won't mate with him, and they may just fight eachother or even kill eachother. They may bully eachother anyway, so make sure they're very healthy (especially the female).
Once you're sure everything is set up perfect, and his nest is done, let her into the tank with him to breed. Don't freak out if they nip at eachother a bit of puff up, it's normal. Just make sure they don't get too aggressive and latch on to fins or flat out fight. It's vital to watch them in case they decide not to get along at any point.
Also, have a place at the bottom to hide, so the female can rest. Once you're sure they're done, and she's been hiding for a while, remove her. She'll eat the eggs or be hurt badly by the male who's taking care of the eggs.
Do not remove the male until all fry have hatched. He takes care of the nest.