My daughter had to be potty trained by the time she entered preschool last fall. She had just turned three when school started, so we started the potty training process at 2 1/2 or a little earlier. We did not go straight to underwear. We took it slow and let her get accustomed to it. She wore diapers and used the toilet when she wanted to up until a couple of months before school started. That's when we did the full on potty training - no diapers, etc. It worked for us, but I know every child is different.
Here's what we did:
Put a basic potty chair in the master bathroom so she could "go" when Mommy went.
Taped a reward chart on the mirrored closet door next to the potty so she could put one sticker when she urinated and two when she pooped. Once she filled up the chart, we gave her a "prize" - a bath toy, coloring book, crayons, etc.
Once she was ready, we moved the removable potty seat and placed it on the toilet, and the put the base of the potty seat on the floor so she could get onto the toilet.
She had two accidents at school and two at night on her way to the potty, but that was nearly a year ago. She almost immediately went all night without diapers and I've been amazed that she wakes up and goes without any problem.
I think the key is to make your child feel like he's in control. He picks out the sticker and he puts it wherever he wants on the chart (our "chart" was just a blank sheet of paper and the prize would be whenever there were X number of stickers on the sheet). The prize thing died out quickly (wasn't important to my daughter), but the stickers lasted quite a while. We stopped the chart and she'll wear the sticker or put it on a page from her coloring book.
I also used colored handsoap to have fun washing hands after using the potty.
Good luck!
S.