Enabling Live Battle on your account

To enable live battle on your profile

Go to Profile -> Your Profile
Scroll to 'Your Preferences'
Make sure the checkbox saying 'Allow other users to challenge me to a Live Battle' is checked
Click 'Save Settings'

Challenging

Enter the username of the person you want to challenge
Click 'Challenge Member..'
If the person is offline or has not enabled live battle on their profile, you will see an error message
If there weren't any problems, it should say that the user was challenged successfully

Once the person has accepted the challenge, you should see a notification at the top-right of your screen, clicking on which will take you to the battle

When someone challenges you to a live battle, you will see a notification at the top-right of your screen.

When the livebattle page says someone is online, is means they have not loaded any page on the site for atleast 5 minutes
The challenger should make any changes to his team before sending the challenge, and the person accepting should make any changes to his team before accepting the challenge.
Once the challenge is accepted, no changes can be made in either team
Report all bugs at the live battle bug thread
Also status on the live battle as to whats working and whats not can be found at Live Battle Status