Pretty simple. One person says a two-word object or common term, and the person after them takes the second word and makes it their first word and adds the second, and so on. Like this:

First person: compact car
Second person: car light
Third person: light blue

...and so on. Don't make your second word something you know no one will think of a two-word phrase for.

And beginning now...

Hair pin.

Pin head.

Head injury.

injury complaint.

Complaint Rock

Thats actually real, I looked it up.

Rock solid

Solid Snake

Snake oil.

Oil drum.

Drum stick.

Stick shift.

Shift wreakage.

wreakage pile.

Pile driver.

driver side.

Side arm.

Arm wrestle

Wrestle world

(I think it's a site. I just googled it... there are many, many more phrases that start with "wrestling" than there are that start with "wrestle"...)

World map

Map quest

Quest card

Card dealer

...See that? You just killed the topic right there.

Um... Dealer of drugs.

...

I'm trying to keep the topic alive, okay?

Drug market.

My bad. :P

Market street.

Street gangs

Gang...s sign...s?

Sign store

Store Bought

Bought things

Things sing.

Sing song.

Song book

Book review.

Review person

:\

person hater

Hater (of) Shoes

Shoes lover

Lover boy.