1) do not trust the colors of the wires. With wires pointing toward you, from left to right, the wires are: signal, ground, and power.
2) connect the power line to +5 on the Arduino, using a 10K resistor (between +5v and the power pin on the IR sensor). See the "how to" page for reading resistor color codes.
3) connect the ground line to GND on the Arduino, and the Signal line to an Analog In port.
4) get a value from the IR Rangefinding sensor using the AnalogRead( nn) instruction. You can start with the tutorial code for "reading a potentiometer" at the Arduino site.
IR rangefinding sensor notes
This is the Sharp GP2D12 IR Sensor. It's a popular sensor, and it is used in many robotics applications, so you can find lots of information about it on the Web. It is one in a family of very similar Sharp IR rangefinding sensors, all of which work the same way. See also the "components" page for more information about this sensor. Its range is 10cm to 80cm, so it won't work for things closer or farther away than that.
