Okay, first of all I'm going to assume you can play. By play I mean, block, jump, attack and defend. Dhalsim is a character whose speciality is controlling space. He can fight at a longer range than any of the other characters and he can fight dirty and close up too. Combo's are not one of his strengths and he is probably the slowest of the world warriors. That said, with good timing and a sound strategy a good Dhalsim player should be able to cope with almost any situation.
2. Getting started.
The first thing you should do when starting to play Sim is go into training mode and get confident at some of his specials. Sim's bread and butter is the Yoga Fire, if you're having trouble with it, try timing the end of the motion for the button release rather than the press. Make sure you hit all the points on the quarter circle and you do it fast and fluid. Really, Dhalsim is a technically challenging character to get to grips with - so I would recommend getting used to playing Ryu or Ken first then move onto Sim once you are familiar with the game. Dhalsim's most basic and tried and tested tactic is to spam Yoga Fires at an opponent and to standing kick them out of the air with his stretchy limbs whenever they try to jump over. Now all the characters have means of dealing with this simple tactic - but it's worth practicing anyway - don't worry if it doesn't work for long, Sim has many, many other great tactics up his sleave.
3. Openers.
Sim, usually wants to get his distance at the start of the fight. He tends to fight best at long range, his middle range is the weak area. Close range can be good for Sim, but only if he is in control of the fight. A standing or crouching heavy or middle punch is a reasonable option, or a yoga fire if you expect something like a charge move like Honda or Blanka's ball or Bisons Psycho Crusher. A standing kick is a possible better bet vs the taller characters, but you can trade hits sometimes with it. The ultimate starter for Dhalsim is to teleport close behind your opponent, if he starts a move - ie a fireball at the same time, you will re-materialise behind them with them locked in the wrong direction - walk up and press middle punch and forwards when touching - for Yoga Noogie.
4. So far.
Okay, so you should have a few specials to use, and an idea of how to start a round. In this part I'm going to go into more details about how to play a round once you've got through that opening moment. To start with I'm going to look at what your options are. Namely the specials we've covered so far, and a few of Sim's normals which you will find useful.
5. The Yoga Fire
The staple Yoga Fire is done the same as a hadouken. It does appear to have a slightly slower startup so be wary of using it when too close. Throw mainly slow ones to make them harder to jump - mix in some middle and heavy and be ready to kick them out of the air if they jump.
6. The Yoga Flame.
This is done like a hurricane kick, with a punch for the normal one and kick button for the anti-air. Light or medium kick is probably the most useful one, the heavy kick flame travels up the screen - which can be useful if Vega or Chun Li are using wall jumps at you. The punch version is great for stopping charge moves - but again startup is a little slow and you can get caught at close range if you're not careful.
7. Yoga Teleport.
This is the only special Sim can use as a reversal - meaning if you hit the deck, your options for getting up are a little limited. It can buy you some time and you should use it to keep out of the corner and at a range you can fight at,
9. Where we are up to.
Okay so if you've been following the guide so far you should have a few options to start, a couple of specials to throw out and be using Sim's basic space controlling tactics.
10. Anti-air options.
Sim has a couple of anti-air options. The obvious one is the kick button yoga flame. Standing middle kick is okay for long range but it can trade, at close range standing middle punch works reasonably if you don't have time for the up flame. You can enjoy some success with a neutral standing heavy punch which does Sim's headbutt - this sometimes wins two hits, but not always on jumping in opponents.
12. Sim's Super Shadow Special.
First of all - this is a tricky move to pull off, however it can be used as a reversal - expect 5 hits out of a good one. If you miss and you are fighting some characters you can be left facing the wrong way for a long time with nothing you can do about it.
13. Drills
The rule with Sim used to be don't jump - as you were generally a sitting duck floating through the air. You still are in some ways, but now he has more drills and they can be done from any height he can take to the air. The priority on the drills seem to have improved too - many moves will at least trade with them. The least useful is the punch drill - this travels more or less horizontal - head first but losing altitude. It's only real use is getting over fireballs but don't try it from too far away or you will eat anti-air. More useful is are the kick button drills, the heavy one can hit particularly low and is great for going into a slide, tick pattern. The rule with the drills is to try to hit low and don't let Sim get too high before you start them. Be particularly careful with tall characters like Zangeif who can take a hit, then SPD you if you aren't careful.
14. Tick throwing.
Sim used to be a mean ticker with his slide, noogie tick pattern. The range on his yoga noogie is reduced now, so it's not as abuseable as before. He can still get people in a tiz with this though and if it isn't working due to the throw range use the heavy punch throw instead - it has great range and ticks well off a Dhalsim slide. The best slide for tick setup is light kick, heavy kick is probably the best drill to get in range with. If this is failing, teleport out to long range and fight there, Sim can fight up close - but he's not great defensively his lack of a reversal apart from teleport and super means he should be attacking or gettig out of there.