How it works
Cold water extracts slowly and selectively. The compounds responsible for bitterness and astringency come out far more reluctantly at low temperature than the sweet and aromatic ones, so a cold brew is naturally soft and sweet even from a tea that goes harsh when hot. This is also why it takes hours rather than minutes — you are trading time for temperature.
The method
Roughly the same leaf as for hot brewing, or slightly more, in cold water. Six to twelve hours in the fridge. Strain. That is the entire technique and it is almost impossible to get wrong: over-steeping by a few hours does far less damage than over-steeping hot tea by one minute.
Which teas suit it
Green teas and lighter oolongs are the standout — sencha cold-brewed is sweet and almost broth-like, and quite unlike the same leaf hot. Whole-leaf black teas work well. Heavily roasted and compressed dark teas are less rewarding, as much of what makes them interesting needs heat to come out at all.
Not the same as iced tea
Iced tea is brewed hot, usually strong, and poured over ice — a fast method that keeps the character of the hot brew and dilutes it. Cold brew is a different extraction producing a different drink. Both are worth making; expecting one to taste like the other is where disappointment comes from. Hot-brewed tea poured over ice also tends to go cloudy as it chills, which cold brew does not.