This is a great method explained in My Dog Pulls What Do I Do by Turid Rugaas. I suggest you work on that first - get your dog used to the cue word, then do the heeling. That way it is easy and should be taught off leash first (start inside the house)- just hold the treat by your waist and keep walking - your dog will come up to you - give the treat. Keep practicing, introduce the heel command still putting your hands up by your waist until he catches on.
Sting Chance von Gaard AKC GSD 2/8/2006