Not currently possible automatically.
You need to find someone who lends you BTC for a certain period of time, for a percentage fee.
Then you sell the borrowed BTC on an exchange (ie MtGox)
And after that you wait until prices dropped and repurchse the BTC
Finally, you return the borrowed BTC to the lender.
Watch out: If BTC prices rise, you make a loss.
Easier on typical western exchanges. You need to select the currency pair (i.e. USD/EUR, USD/JPY, etc.) and you find warrants, bear certificates, etc. to play either side.
If you want to short USD vs. BTC, this is easy: It just means you buy BTC for dollars (if you have USD...)
hope this helps a bit
Well, with currencies this isn't quite accurate imo.
As you know every exchange rate is made up of a currency pair ie: BTC/USD. By holding BTC your are automatically shorting USD because you believe the value of the USD to decrease with respect to BTC. If you sell BTC for some USD then you are taking a short position in BTC (and a long position in USD) because you believe the value of BTC to decrease with respect to USD. Unlike stocks you don't need to borrow anything from anyone. If you want to short BTC, just don't buy any and wait for the price to drop, or sell some of the ones you currently have.