I have followed the OGL since it was created, though and have a pretty good understanding of it and have not been sued yet after 20 products (and no C&D letters, either).
Short Version: Put the OGL in the end of your product and update Section 15 (the last part of it) so it looks like this:
Open Game License v 1.0a © 2000, Wizards of the Coast, Inc.
System Reference Document Copyright 2000–2003, Wizards of the Coast, Inc.; Authors Jonathan Tweet, Monte Cook, Skip Williams, Rich Baker, Andy Collins, David Noonan, Rich Redman, Bruce R. Cordell, based on original material by E. Gary Gygax and Dave Arneson.
<The Section 15 of any Product You Used, most notably if you used a retro clone or monster book*>
Your Product Name, Copyright The Year, Your (or your company) Name
* Only use products that have open content and only use that open content. I have seen people list the old AD&D books in their Section 15. They do not have open content. The only WOTC products that have open content are the SRDs (3.5 and 5.1) and the 3.5 version of Unearthed Arcana, and no TSR era products do.
That's not to say you can't refer to spells or even many monsters from those old books. If you couldn't, then we wouldn't have any retro clones. Just don't ever copy any text and only use names that are clearly generic and non-original to D&D unless they happen to be in the SRD. Much like D&D used halfling instead of hobbit, balor instead of balrog, treant instead of ent. Don't use proper names from any D&D setting.
Also you don't need to list things twice in section 15. Like if two book use the same source (indeed, like the SRD), you only need it listed once in section 15.
Long Version
What is the OGL?
In the run up to 3rd Edition, WOTC had an idea to push sales of their corebooks and at the same time, eliminate unofficial products like those by Mayfair (their Role-Aids line).
Essentially the premise what that they would let people use certain terminology (avoiding the clumsy "Hits to Kill" or "Skill" instead of "Level" in Role-Aids) and even use exact text in exchange for giving up their rights to advertise compatibility used by Role-Aids (and used by generic products that say "Compare to Brand Name").
They then had a separate license (then the d20 license which is now defunct) which would allow use of a logo and say "Requires of the Use of the Dungeons & Dragon's 3rd Edition Player's Handbook. However, that license, the d20 System Trademark License could be and was terminated. On the other hand, the Open Game License cannot be terminated.
So what does this mean?
It means if you use the OGL, you cannot say "Compatible with Advanced Dungeons & Dragons" or with "Basic Dungeons & Dragons" or whatever system you are using. You have to say something like "For use with the Original Edition of the Worlds Most Popular Fantasy Role-Playing Game" or the "For use with the First Advanced Edition of the Worlds Most Popular Fantasy Role-Playing Game"
There are also various retro-clones that have trademark licenses. OSRIC for 1e, Labyrinth Lord for B/X, Swords & Wizardry for house ruled OD&D, and Mutant Future for Gamma World. But generally they have restrictions, so be careful if you use them.
Do I have to use the OGL?
Probably not. Mayfair produced a large number of unofficial AD&D products, though they did get sued. They also used different game terms (Hits to Kill instead of Hit Points) and spell names.
But the OGL lets you use all the terminology and many spell names. You can also copy any text that is open content. To a certain that last part is only useful if you are making a rulebook of some kind.
So what exactly can I use?
Anything in either the 3.5 SRD or the more recent 5.1 SRD. (There's also the Modern SRD, but that is mostly redundant with the 3.5 SRD and not real applicable to most OSR stuff)
Realistically, you can refer to phrases in regular English (no proper names), such as spell names, class names (like a Cavalier or even an Anti-Paladin). You can say "Continual Light" instead of "Continual Flame" , the latter of which is the spell in the SRD.
But definitely do not use something like Tenser's Sword or Otto's Irresistible Dance. One of the few times WOTC squashed products was with Jim Ward using Drawmij in his Fast Forward products. You can just leave off the name, like Irresistible Dance, or change it to "Mage's Sword" or something that gives the idea of what it is, but doesn't use a proper name.
There are some things totally off limits, though.
What can't I use?
Essentially, you can't use any of WOTC's IP. This means campaign settings, NPCs, proper names, etc. And direct copying of text not from the SRD (or the 3.5 Unearthed Arcana which is the only product WOTC ever released besides the SRD that had open content in it)
You specifically can't use these monsters: Beholder, Carrion Crawler, Displacer Beast, Githyanki/Githzerai, Kuo-Toa, Mind Flayer/Ilithid, Umber Hulk, Slaad, Yuan-Ti. They have been specifically cited as "Product Identity". Others like Thri-Keen or Wemic have not been released as open content and have original enough names that you can't really use them. At least WOTC thinks so, which is mostly what matters.
Those aren't the only monsters you can't use, but they are the ones that WOTC specially wanted to protect. However, if the monster comes from real world mythology (and many do) then you can use them. But again, never copy any text that is not open content
What is Product Identity?
Basically in products using the OGL, it's stuff declared off limits. This is generally setting related material, company names, real people's names, and so forth. It cannot include game mechanics, though a lot of game authors/companies try to and make deliberately confusing product identity statements.
Section 15
The key part of the OGL is Section 15. It's a listing of the open content sources used in that product, including that particular product.
Almost everyone gets this wrong, even to this day. So much so I have to think it's deliberate, since if you don't have a correct section 15, it makes it hard for other people to use open content from your product.
But to use it properly, you need to add the section 15 of every product you've used open content from. Even if you know that the open content you are using didn't use it.
Then you need to add your product. Blank Blank Blank Copyright 2018 (or whatever year it is) and your name (or whatever you want the copyright under)
Special Case - The Tome of Horrors
Many of the classic monsters were not released as part of the SRD, but were not listed as product identity, either. Many of these were released in a book from Necromancer Games called the Tome of Horrors.
However, this book used the OGL differently. Rather than being a single book, it's treated as if each separate monster is its own OGL stand alone product. Each monster entry in the book ends with a section listing the proper text to put in Section 15 of your product.
For instance, say you wanted to use the Dark Creeper and Dark Stalker. They aren't in the SRD, but hey, they're in the Tome of Horrors. So you go to that and find the entries for them and copy them into your section 15
Dark Creeper from the Tome of Horrors, Revised, © 2002, Necromancer Games, Inc.; Author Scott Greene, based on original material by Rik Shepard.Things are further complicated by later releases of the book, and from a different company as well. And furthermore, that company (and seemingly its successor) was immune to the special rules of the Tome of Horror. So you have to be very wary of using open content from Necromancer Games/Sword & Sorcery Studios/Frog God Games because they don't play by the rules the rest of us have to.
Dark Stalker from the Tome of Horrors, Revised, © 2002, Necromancer Games, Inc.; Author Scott Greene, based on original material by Simon Muth.
Also, because the OGL is viral, where you have to copy the entire section 15 of a product you use, even if you don't use the open content they used, the size of section 15 can really balloon thanks to all the entries from the Tome of Horror.
Wrapping Up
So basically what your Section 15 Looks like should be something like
Open Game License v 1.0a © 2000, Wizards of the Coast, Inc.
System Reference Document Copyright 2000–2003, Wizards of the Coast, Inc.; Authors Jonathan Tweet, Monte Cook, Skip Williams, Rich Baker, Andy Collins, David Noonan, Rich Redman, Bruce R. Cordell, based on original material by E. Gary Gygax and Dave Arneson.
<The Section 15 of any Product You Used>
My Product, Copyright 2017 Me
Note: That you can use the 5th edition SRD instead, so it might look like
Open Game License v 1.0a © 2000, Wizards of the Coast, Inc.
System Reference Document 5.0 Copyright 2016, Wizards of the Coast, Inc.; Authors Mike Mearls, Jeremy Crawford, Chris Perkins, Rodney Thompson, Peter Lee, James Wyatt, Robert J. Schwalb, Bruce R. Cordell, Chris Sims, and Steve Townshend, based on original material by E. Gary Gygax and Dave Arneson
<The Section 15 of any Product You Used>
My Product, Copyright 2017 Me
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