We had new siding put on our house in 2008. I run a daycare out of my home. How do I depreciate the cost of the new siding?

Where are you? If in Canada, I would not recommend it. You could possibly end up paying capital gains when you sell the house if you've been dpreciating part of it for a business.

Its probably better to have the daycare pay yourself rent to use the house, and then write-off a portion of utilities, taxes, insurance, and interest against the rent. If you limit it to operating expenses and not capital expenses then you don't affect taxes when you sell the house