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As using route reflector is a way simplifying and scaling iBGP configuration, it is recommended to use if you have many routers in your AS.

To configure route reflector in Cisco router is really simple.
1. Add command

neighbor <ip address client> route-reflector client
2. Ordinary BGP configuration in client router

BGP configuration template on route reflector will be:
router bgp xxxx
neighbor y.y.y.y remote-as zzzz
neighbor y.y.y.y route-reflector client

On the client side, BGP configuration will be as usual.

Example
Router 1 is route reflector, and will peer with router 2, route reflector client, and router 3, non client router.  The BGP configuration will be like this.

Router 1 Configuration:
router bgp 65535
neighbor 10.1.2.4 remote-as 65535
neighbor 10.1.2.4 update-source loopback0
neighbor 10.1.2.4 route-reflector client
neighbor 10.1.2.5 remote-as 65000
neighbor 10.1.2.5 update-source loopback0

Router 2 Configuration

router bgp 65535
neighbor 10.1.2.3 remote-as 65535
neighbor 10.1.2.3 update-source loopback0
Router 3 Configuration

router bgp 65000
neighbor 10.1.2.3 remote-as 65535
neighbor 10.1.2.3 update-source loopback0

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