I know that you need to be hidden in shadows in order to backstab, but what do you do next?

Get behind the target and pause it then push sword button (choose to attack) and click on the target. That should backstab them.

that's what i was doing but it doesn't seem to give the demage multiplayer

What is your character?
If its multi/dualclass, then make sure you are not wearing a weapon thief cant use.
One of the forum gurus may come up with a list of weapons that can be used to backstab.

And make sure you are standing right behind the target. that you're invis (or in shadows).
hte battle text should say "Backstab quandriple (i.e.) damage".

the weapons a thief can use to backstab are: Katana, scimitar/wakizashi/ninja-to, longsword, broadsword, shortsword, dagger, club, quarterstaff. any other specific weapon in the list that is unusable by single class thieves i.e. the mage only quarterstaff, Valygar's katana unless the baldurdash fixpack is used, monk wakizashi (I think)

Hmm...so a thief can use a blunt weapon (club/quarterstaff) to backstab? I thought it was just a bladed weapon. Or is that a BG1/SoA limitation that ToB doesn't have?

I know for a fact it works in IWD and they are weapons allowed to a normal thief, maybe when i get my comp set up again i'll test it with just SoA but I believe it's available to all thief usable melee weapons (it's more about knowing where t hit to get max effect than just impaling organs, ie a good solid blow to the spine/kidneys/skull with a blunt is just as deadly as sticking a sword into someone)

There is a thief in one particular encounter in Chapter Six, who wields a mace. Before I had ToB, he couldn't backstab me with the mace. But he could when I got ToB, if I recall correctly.

And backstab is purely an attack that catches your opponent unaware, thus he cannot dodge nor parry.

I prefer the IWD2 version of backstab. As far as I can tell you only have to standing behind them. Not be invisible.

Warby

I've got ToB and all the patches, and if I'm thinking of the same guy that you're thinking of (he wears a Ruby Pendant, yes?), then my computer tells him "your weapon is unsuitable for Backstab." Should have used the Staff Mace instead, pal.....