1. we need a scanned hi-res bitmap image of a map
2. go to http://labs.metacarta.com/rectifier/ and upload your map
3. you will see two map viewers: left - your image; right - reference map
4. click "+" sign at the right side of reference map viewer and pick a map provider (I've chosen google satellite)
5. set 5-6 control markers on both maps (I've added seven)
6. from a drop-down menu below reference map select linear or quadratic fit (seems to me that linear is faster but less accurate)
7. click "warp!"
8. download and install josm or "sudo apt-get install josm"
9. start josm. go to "edit"->"preferences"->"plugins" (fifth tab from top, the one with a plug)
10. find and check "wmsplugin". apply settings. restart josm.
(if everything is fine, next time you start josm it has to have "WMS" menu item in main menu)
11. go to openstreetmap and find the place you want to add streets to and copy the "permalink" url, e.g.
(don't forget to sign up at OSM otherwise you won't be able to save your edits online)
11a. in josm go to "edit"->"preferences"->"network" (second tab) and enter your OSM username and password.
12. in josm go to "file"->"download from OSM"->"Bounding Box" and paste the above url into text box signed "URL from www.openstreetmap.org"->"ok"
13. you will get a "Data Layer" containing streets (make sure the "layers" pane is visible and use "select tool" to check out street names)
14. go to "WMS"->"Rectified Image...". enter your metacarta image id (just the number, e.g. if your map is located at http://labs.metacarta.com/rectifier/map/74, you enter 74)
15. now you get a new layer called "rectifier id=74". click "Data Layer" to see it on top of image layer.
16. add some streets.
17. "file"->"upload to OSM"
18. according to osm wiki - results will show up in a few days
and that's it.