Instructions
Find the person you intend to pickpocket and follow him until he goes to a quiet and secluded area where there are no witnesses. You can only pickpocket human characters.
Press the "L3" button to go into a crouch. Make sure that your status at the top of the screen is "Hidden" by staying out of any character's line of sight. If your sneak is not high enough, you can use a Stealth Boy to make yourself temporarily invisible.
Slowly approach the character you wish to pickpocket until your reticule prompts you to pickpocket the victim. Stop moving and make sure you are hidden.
Press "X" to open up your target's inventory and take whatever items you want. Weapons and armor that your target has equipped cannot be taken by pickpocketing.
Close the target character's inventory.