snarkbite's final rewrite below, with random bits from me (mostly the last sentence, so if it sucks, yell at me, not her :p).To create a community, you will need to have two pre-existing personal accounts. The first account remains a personal journal which can continue to represent you as an individual as well as the person who maintains (controls) the new community. The second account is converted from a personal account into the new community. The second account must not have any entries in it when you convert it.
If you do not already have two separate accounts, you will need to create the necessary accounts (http://www.livejournal.com/support/faqbrowse.bml?faqid=104) before continuing. The username you choose for the account that will become the community must not already be in use by any other user or community.
Once you have two accounts, log in as the account that will become the maintainer (http://www.livejournal.com/login.bml) and proceed to the Create Community page (http://www.livejournal.com/community/settings.bml?mode=create). Do not log in as the account you want to convert. In the "Community Account" section of the Create Community page, enter the username and password for the second account, the one you want to convert to a community. Use the rest of the page to define the various membership, posting, and moderation settings for the new community (http://www.livejournal.com/support/faqbrowse.bml?faqid=79).
When you have finished selecting your options, click the Create Community button to convert the second account into a community. For general assistance in maintaining your community once it has been set up, you may wish to see the Community Management FAQs (http://www.livejournal.com/support/faqbrowse.bml?faqcat=comm-manage).