HERBS: Basil Basics: Prune basil regularly for best flavor. About every four weeks, prune basil back to just above the bottom two sets of leaves. If allowed to flower, it will lose flavor. From Fine Gardening.
Prune basil so it stays bushy and productive On a basil plant the leaves grow in twos opposite each other. As the little plant send up the stock it will grow two more leaves. You need to go to those two leaves and prune about one inch or so above them.