To choke someone, you simply need to be behind them undetected (sneaking optional but it helps), then press and hold the choke button. On Xbox 360 it will be RB, and on PS3 it will be R1.
It will take a few seconds to knock someone out, so always make sure you have ample time to not only get them choked, but to drag and hide their body as well.
One of my favorite tactics when choking people is to use it immediately after a Blink. Lets say you’re trying to knock out an enemy, but there aren’t many places to hide near his path. Once you wait for him to turn around, come out of your hiding spot and blink directly to his back and begin to hold the choke button on the way. You’ll blink to him, and immediately choke him out.
You can also use this to blink down from a high point and choke, as well as blinking across a hallway for example that has enemies to choke an enemy on the other side, as long as your “landing” spot can’t be seen by other enemies.