Before the day of Eid, during the last few days of Ramadan, each Muslim family gives a determined amount as a donation to the poor. This donation is of actual food -- rice, barley, dates, rice, etc. -- to ensure that the needy can have a holiday meal and participate in the celebration. This donation is known as sadaqah al-fitr (charity of fast-breaking).
On the day of Eid, Muslims gather early in the morning in outdoor locations or mosques to perform the Eid prayer. This consists of a sermon followed by a short congregational prayer.
After the Eid prayer, Muslims usually scatter to visit various family and friends, give gifts (especially to children), and make phone calls to distant relatives to give well-wishes for the holiday. These activities traditionally continue for three days. In most Muslim countries, the entire 3-day period is an official government/school holiday.
Taken from http://islam.about.com
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