How Should we Observe Laylat al-Qadr and when is it?

firstly: 

the messenger of allaah (peace and blessings of allaah be upon him) used to strive hard in worship during the last ten days of ramadaan as he never did at any other time, praying, reading qur’aan and making du’aa’. al-bukhaari and muslim narrated from ‘aa’ishah (may allaah be pleased with her) that when the last ten days of ramadaan came, the prophet (peace and blessings of allaah be upon him) would stay up at night and would wake his family up, and would abstain from marital relations. ahmad and muslim narrated that he used to used to strive hard in worship during the last ten days of ramadaan as he never did at any other time. 

secondly: 

the prophet (peace and blessings of allaah be upon him) enjoined staying up and praying on laylat al-qadr out of faith and in the hope of reward. it was narrated from abu hurayrah (may allaah be pleased with him) that the prophet (peace and blessings of allaah be upon him) said:  “whoever stays up and prays on laylat al-qadr out of faith and in the hope of reward, his previous sins will be forgiven.” agreed upon. this hadeeth indicates that it is prescribed to observe laylat al-qadr by spending the night in prayer. 

thirdly: 

one of the best du’aa’s that may be recited on laylat al-qadr is that which the prophet (peace and blessings of allaah be upon him) taught to ‘aa’ishah (may allaah be pleased with her). al-tirmidhi narrated, and classed the report as saheeh, that ‘aa’ishah said: “i said, ‘o messenger of allaah, if i know which night is laylat al-qadr, what should i say on that night?’ he said, ‘say: allaahumma innaka ‘afuwwun tuhibb al-‘afwa fa’affu ‘anni (o allaah, you are forgiving and you love forgiveness, so forgive me).” 

fourthly: 

with regard to specifying which night of ramadaan is laylat al-qadr, this needs specific evidence, but the odd-numbered nights during the last ten nights are more likely than others, and the night of the twenty-seventh is the most likely to be laylat al-qadr, because that is mentioned in the ahaadeeth. 

fifthly: 

with regard to innovations, they are not permissible during ramadaan or at other times. it was proven that the messenger of allaah (peace and blessings of allaah be upon him) said: “whoever innovates anything in this matter of ours that is not part of it will have it rejected.” according to another report, “whoever does any action that is not part of this matter of ours will have it rejected.” 

we know of no basis for the celebrations that are held during some nights of ramadaan. the best of guidance is the guidance of muhammad (peace and blessings of allaah be upon him) and the worst of matters are those which are innovated (bid’ah). 

and allaah is the source of strength. may allaah send blessings and peace upon our prophet muhammad and his family and companions.