Misstigerlily- first of all, check that your 'female' is infact a female! I've never had a female that has blown a bubble nest, and very very few females do. Quite often pet stores mistake male plakats (a short finned variety of betta) as females, and label them incorrectly. Can you post some pictures of the fish?
When it comes to breeding, the tricky bit is raising the fry, not so much getting the adults to actually breed. From my experience the fry will not eat non-living food until about a minimum of 6wks of age. For feeding, I prefered to use baby brine shrimp, though some prefer microworms (but supposedly microworms have been linked to having fry missing ventral fins- not all spawns, but there seems to be a correlation).
Setup- you'll need a fair sized tank or container (I had ~50L water) to breed them in, as the fry are extremely sensitive to poor quality water- if you breed them in a small volume of water, it is trickier to keep the water clean enough for the fry to remain healthy. Sponge filters are generally used to filter the water, after the fry are a bit larger and can swim better. A heater to keep them at their optimal temperature (I kept mine at 28'). Lots of plants to provide coverage for the female to hide from the male during the breeding process, if he gets too aggressive, and after they've spawned.
Setting up the breeding tank; start with the tank having water about 15cm deep, include a lot of plants and places for the female to hide, a heater and thermometer to keep the temperature steady. The water height is important- if it is too deep, the male may have difficulty finding and placing eggs back in the bubble nest.
Breeding; you need to condition the adults for at least two weeks prior to breeding- live foods and frozen bloodworms are good for this. I kept the male in my breeding tank while conditioning him, so he was well and truly adjusted to the new environment. When they had both been conditioned, I placed the female in a clear plastic container, and floated it in the males tank. The purpose of this is to let them see each other, and stimulates the male to produce a bubble nest (if he hasn't already). The female is ready to breed when she 'bars up'- that is, she gets vertical stripes up her body, and when she starts to position herself with her head down- these are signs to the male that she is ready to spawn. When this occurs, release the female. It is important to have a lot of hiding places for her, because the males are often extremely aggressive and can seriously injure her/kill her. Often the male will chase her around a lot to start with, but eventually he will lead her to the bubble nest, or she will come up by herself. Once they've spawned, its important to remove the female straight away- after spawning the males get extremely aggressive and will try to kill the female, as they are guarding their nest. If left in the tank, the female will also often try to eat the eggs, which of course is not desirable!
It usually takes about 2days for the eggs to hatch, and during this time the male will remain near the nest. when eggs fall from the nest, he'll pick them up in his mouth and spit them back into the nest. During this period, make sure you leave the light on at night so they can see the eggs as they fall- if they fall and remain on the bottom of the tank, they usually seem to become non viable.
Once the eggs have hatched, the fry will hang from the nest, with their tails down- they aren't able to swim properly at this stage. the male will still pick the fry up and put them back in the nest when they fall. When the fry start to 'free swim' (they swim around horizontally by themselves), remove the male and offer the fry their first feed. Some people suggest using something like boiled egg yolk, but I've never had any success with this- my fry would only eat live baby brine shrimp.
Now, the fun part! trying to feed the fry enough to get them to grow as quickly as possible, and maintaining the water clean enough! I used to feed all of my fry about 4x daily to start with, and did 2 water changes a day. I don't have the filter on at this stage, becase the fry aren't the best swimmers. When doing water changes, I use a bit of airline tubing to syphon the crud off the bottom of the tank- syphon this water into another clear container, and check it for fry before you tip it out- the fry can very easily be sucked up, and they're difficult to see at the best of times.
as they get older, you can offer things like daphnia, grated bloodworms, and crushed up betta pellets. You'll need to have seperate containers/tanks/barracks for the fry as they get older, when they start to fight- remove the ones that are more aggressive to individual housing.
In regard to housing
Betta splendens together, the only combined housing is keeping females together, and even this can be tricky. if a male is kept with a female(s), he will constantly harrass her and will usually seriously damage her as they are usually extremely aggressive. keeping to males together is obviously not possible, either... when keeping females together, I'd suggest that there is a minimum of 4 girls, you need heaps of plants and hiding spots, and a large enough tank so they can all escape each other. When keeping females together, they can still cause
serious damage to each other if certain females are not compatible (some are extremely aggressive- some of my girls have been more aggressive then my males), and they cannot be kept in a group (called a 'sorority').
For some good help and information regarding breeding, checkout "Ultimate Bettas"- the site is loaded with information, and the members there really know what theyre talking about (most of them, at least).
http://www.ultimatebettas.com/