Heat treating O1 tool steel, in principle, is quite simple. Hardening the steel is not much more than bringing it to critical temperature (1450˚-1500˚), quenching it in vegetable oil followed by tempering in a 400° oven for one hour. The real challenge lies in minimizing warpage.
The key to success is heating your steel evenly. Creating an enclosure with something such as fire brick will help you achieve this. The enclosure will act to both block the wind and keep the heat more evenly distributed around the steel. You want the heat from the torch to really envelope the steel, so that means smaller is probably better.
For your heat source, a simple MAPP gas torch will work for most hobbyist applications. This will heat treat 1/8" x 1/2" sizes quite well. It will work on larger pieces if you use careful manipulation of the steel in the flame, from my experience. MAPP gas can heat the steel very quickly - but that is not what you want to do! Remember that even heating of the steel will minimize warpage - so take it slow. If one side is hotter than the other when you quench it in the oil, it will warp. So, again, heat slowly.
There are a few methods that will help you determine when you have reached critical temperature. Avoid relying on color to determine temperature since ambient light will affect what color you see. Just like a flashlight appears brighter at night than in daylight, so too color alone in changing light conditions can be deceptive. The simplest way to check that you have reached critical temperature is to use a magnet since O1 tool steel looses its magnetism at approximately this temperature. Below is a short video on how to do this.
Another option is to watch the surface quality of the steel. It will change when critical temperature is reached because the carbon begins to flow within the steel and some decarburization takes place at the surface, thus changing how it looks. It can be described as the steel “sweating” or having a “flushed” appearance. This can take practice to train your eye to see this. The extent to which it occurs also depends on how clean the surface of the steel is and how much oxygen is present. Its best to start with the magnet method and then once you learn what it should look like then you can switch to just doing it by eye. Larry Williams of Old Street Tools has a great video showing what this looks like.
Just as even heating is critical to minimizing warpage, even quenching is essential. Once critical temperature is reached, quench the steel in oil by plunging the blade straight down vertically, not leaning to one side or the other. Plunging down with the blade leaning will cause one side to cool more quickly than the other and warpage will occur. Don't swirl it in the oil, either. That will also cause one side to cool more quickly than the other. Just plunge straight down.
WARNING: Do not put your hand directly above the oil when you quench your blade. The heat of the steel may cause a small flare up of the oil, burning whatever is in it's path. It is always best to do this outside, well away from any wood shavings, and have a fire extinguisher on hand. Better safe than sorry.
After quenching immediately move the blade to your oven to temper for one hour at 400˚. This will leave you with a hardness of around 62Rc. Plenty good for any woodworking application.