Printer settings: Letter, Portrait, Two-sided, flip on long edge, margins None, scale 100% (not "fit to page").
Each sheet has 8 pages. Cut every sheet in half along the side ticks. Stack all the top halves in sheet order, then put all the bottom halves after them. Fold the whole stack in half along the center ticks and staple on the fold.
First time? Print the test sheet and do the cut, stack and fold. The pages should read 1 to 8 upright, with the dark bar on the spine side of each page.