Update

Make sure Raspbian is up to date:
sudo apt-get update
sudo apt-get upgrade

Install dependencies:

sudo apt-get -y install build-essential cmake cmake-curses-gui pkg-config libpng12-0 libpng12-dev libpng++-dev libpng3 libpnglite-dev zlib1g-dbg zlib1g zlib1g-dev pngtools libtiff4-dev libtiff4 libtiffxx0c2 libtiff-tools libeigen3-dev

Then do

sudo apt-get -y install libjpeg8 libjpeg8-dev libjpeg8-dbg libjpeg-progs ffmpeg libavcodec-dev libavcodec53 libavformat53 libavformat-dev libgstreamer0.10-0-dbg libgstreamer0.10-0 libgstreamer0.10-dev libxine1-ffmpeg libxine-dev libxine1-bin libunicap2 libunicap2-dev swig libv4l-0 libv4l-dev python-numpy libpython2.6 python-dev python2.6-dev libgtk2.0-dev

Install OpenCV

Download OpenCV from http://opencv.org/downloads.html

wget http://sourceforge.net/projects/opencvlibrary/files/opencv-unix/2.4.8/opencv-2.4.8.zip/download opencv-2.4.8.zip

Or get the latest snapshot from the git repo:

git clone https://github.com/Itseez/opencv.git

Unzip and prepare for build

unzip opencv-2.4.8.zip
cd opencv-2.4.8
mkdir release
cd release
ccmake ../

Configuring

press ‘c’ to configure
once done toggle the options you want. This were mine:

ANT_EXECUTABLE                   ANT_EXECUTABLE-NOTFOUND                                                                                               
BUILD_DOCS                       ON                                                                                                                    
BUILD_EXAMPLES                   ON                                                                                                                    
BUILD_JASPER                     ON                                                                                                                    
BUILD_JPEG                       ON                                                                                                                    
BUILD_OPENEXR                    ON                                                                                                                    
BUILD_PACKAGE                    ON                                                                                                                    
BUILD_PERF_TESTS                 ON                                                                                                                    
BUILD_PNG                        ON                                                                                                                    
BUILD_SHARED_LIBS                ON                                                                                                                    
BUILD_TBB                        OFF                                                                                                                   
BUILD_TESTS                      ON                                                                                                                    
BUILD_TIFF                       ON                                                                                                                    
BUILD_WITH_DEBUG_INFO            ON                                                                                                                    
BUILD_ZLIB                       ON                                                                                                                    
BUILD_opencv_apps                ON                                                                                                                    
BUILD_opencv_calib3d             ON                                                                                                                    
BUILD_opencv_contrib             ON                                                                                                                    
BUILD_opencv_core                ON                                                                                                                    
BUILD_opencv_features2d          ON                                                                                                                    
BUILD_opencv_flann               ON                                                                                                                    
BUILD_opencv_gpu                 ON                                                                                                                    
BUILD_opencv_highgui             ON                                                                                                                    
BUILD_opencv_imgproc             ON                                                                                                                    
BUILD_opencv_legacy              ON                                                                                                                    
BUILD_opencv_ml                  ON                                                                                                                    
BUILD_opencv_nonfree             ON                                                                                                                    
BUILD_opencv_objdetect           ON                                                                                                                    
BUILD_opencv_ocl                 ON                                                                                                                    
BUILD_opencv_photo               ON                                                                                                                    
BUILD_opencv_python              ON                                                                                                                    
BUILD_opencv_stitching           ON                                                                                                                    
BUILD_opencv_superres            ON                                                                                                                    
BUILD_opencv_ts                  ON                                                                                                                    
BUILD_opencv_video               ON                                                                                                                    
BUILD_opencv_videostab           ON                                                                                                                    
BUILD_opencv_world               OFF                                                                                                                   
CLAMDBLAS_INCLUDE_DIR            CLAMDBLAS_INCLUDE_DIR-NOTFOUND                                                                                        
CLAMDBLAS_ROOT_DIR               CLAMDBLAS_ROOT_DIR-NOTFOUND                                                                                           
CLAMDFFT_INCLUDE_DIR             CLAMDFFT_INCLUDE_DIR-NOTFOUND                                                                                         
CLAMDFFT_ROOT_DIR                CLAMDFFT_ROOT_DIR-NOTFOUND                                                                                            
CMAKE_BUILD_TYPE                 Release                                                                                                                 
CMAKE_CONFIGURATION_TYPES        Debug;Release                                                                                                               
CMAKE_INSTALL_PREFIX             /usr/local
CMAKE_VERBOSE                    OFF                                                                                                                   
CUDA_BUILD_CUBIN                 OFF                                                                                                                   
CUDA_BUILD_EMULATION             OFF                                                                                                                   
CUDA_HOST_COMPILER               /usr/bin/gcc
CUDA_SDK_ROOT_DIR                CUDA_SDK_ROOT_DIR-NOTFOUND                                                                                            
CUDA_SEPARABLE_COMPILATION       OFF                                                                                                                   
CUDA_TOOLKIT_ROOT_DIR            CUDA_TOOLKIT_ROOT_DIR-NOTFOUND                                                                                        
CUDA_VERBOSE_BUILD               OFF                                                                                                                   
EIGEN_INCLUDE_PATH               /usr/include/eigen3
ENABLE_NEON                      OFF                                                                                                                   
ENABLE_NOISY_WARNINGS            OFF                                                                                                                   
ENABLE_OMIT_FRAME_POINTER        ON                                                                                                                    
ENABLE_PRECOMPILED_HEADERS       ON                                                                                                                    
ENABLE_PROFILING                 OFF                                                                                                                   
ENABLE_SOLUTION_FOLDERS          OFF                                                                                                                   
ENABLE_VFPV3                     OFF                                                                                                                   
EXECUTABLE_OUTPUT_PATH           /home/pi/opencv-2.4.8/release/bin
GIGEAPI_INCLUDE_PATH             GIGEAPI_INCLUDE_PATH-NOTFOUND                                                                                         
GIGEAPI_LIBRARIES                GIGEAPI_LIBRARIES-NOTFOUND                                                                                            
INSTALL_CREATE_DISTRIB           OFF                                                                                                                   
INSTALL_C_EXAMPLES               OFF                                                                                                                   
INSTALL_PYTHON_EXAMPLES          OFF                                                                                                                   
INSTALL_TO_MANGLED_PATHS         OFF                                                                                                                   
OPENCV_CONFIG_FILE_INCLUDE_DIR   /home/pi/opencv/opencv-2.4.8/release
OPENCV_EXTRA_MODULES_PATH                                                                                                                              
OPENCV_WARNINGS_ARE_ERRORS       OFF                                                                                                                   
OPENEXR_INCLUDE_PATH             OPENEXR_INCLUDE_PATH-NOTFOUND                                                                                         
PVAPI_INCLUDE_PATH               PVAPI_INCLUDE_PATH-NOTFOUND                                                                                           
PYTHON_NUMPY_INCLUDE_DIR         /usr/lib/pymodules/python2.7/numpy/core/include
PYTHON_PACKAGES_PATH             lib/python2.7/dist-packages
SPHINX_BUILD                     SPHINX_BUILD-NOTFOUND                                                                                                 
WITH_1394                        OFF                                                                                                                   
WITH_CUBLAS                      OFF                                                                                                                   
WITH_CUDA                        OFF                                                                                                                   
WITH_CUFFT                       OFF                                                                                                                   
WITH_EIGEN                       ON                                                                                                                    
WITH_FFMPEG                      ON                                                                                                                    
WITH_GIGEAPI                     OFF                                                                                                                   
WITH_GSTREAMER                   ON                                                                                                                    
WITH_GTK                         ON                                                                                                                    
WITH_JASPER                      ON                                                                                                                    
WITH_JPEG                        ON                                                                                                                    
WITH_LIBV4L                      ON                                                                                                                    
WITH_NVCUVID                     OFF 
WITH_OPENCL                      ON                                                                                                                    
WITH_OPENCLAMDBLAS               ON                                                                                                                    
WITH_OPENCLAMDFFT                ON                                                                                                                    
WITH_OPENEXR                     ON                                                                                                                    
WITH_OPENGL                      ON                                                                                                                    
WITH_OPENMP                      OFF                                                                                                                   
WITH_OPENNI                      OFF                                                                                                                   
WITH_PNG                         ON                                                                                                                    
WITH_PVAPI                       ON                                                                                                                    
WITH_QT                          OFF                                                                                                                   
WITH_TBB                         OFF                                                                                                                   
WITH_TIFF                        ON                                                                                                                    
WITH_UNICAP                      OFF                                                                                                                   
WITH_V4L                         ON                                                                                                                    
WITH_XIMEA                       OFF                                                                                                                   
WITH_XINE                        OFF                

press ‘c’ again to configure with your new settings
press ‘g’ to generate the Makefile

And finally, build. This will take a long time (about 4 hours!).

make
sudo make install