Creating lat/lon grid in QGIS?

use the MMQGIS plugin, after installing you find it in qgis 1.8 under plugins--mmqgis. select create --create grid layer and enter the appropriate values

for h spacing and v spacing select 1 or 0.5 (instead of 10 in my screenshot)

hope this helps

Another option is to use the built-in Vector Grid tool. (Toolbar menu: Vector → Research → Vector Grid):