A blow-off valve is a device used on turbocharged engines that helps to control the amount of pressure running through the system. The valve releases pressure in a controlled manner to help preserve the integrity of the system. To make sure that the proper amount of pressure is being relieved, you must adjust the valve so that it is not too tight--causing compressor surge--and not to loose--causing a vacuum leak.
Turn the engine on and listen to the blow off valve. If it is improperly adjusted, you should hear either a compressor surge or an excessive vacuum leak (it will sound like air rushing out of the valve). Compressor surge is a phenomenon where pressure builds up in a turbocharging system and has no where to go (because the valve is completely closed). The pressure is relieved by taking the only route available to it: the turbocharger compressor housing. The sound it makes is called "fluttering," and is the sound of the pressure charge encountering the spinning compressor wheel as it escapes the system. This can damage the turbocharger over time, so it's important to make sure that you do not keep the valve closed on your blow-off valve.
Turn the valve adjustment screw clockwise with an allen wrench until the valve is all the way closed. You should start to hear a compressor surge.
Turn the adjustment screw back just far enough counterclockwise that the surge stops. Although the only way to optimize the performance of your turbocharger is to have it professionally tuned on a dynamometer, this process will give you a "rough tune" so that you can drive the vehicle safely.
