The heel uses the wrap and turn method. If this is new to you, then this tutorial is well worth a look. It's a simple method but it might be worth a little practice first just to make sure you get it straight in your mind before attempting the heel. The heel is worked back and forth on needle 2, so work across the 1st 32st on needle 1, ready to start:
K31, W&T, always ensure wrapped st is slipped back to right hand needle, turn work.
Keep going in this fashion - working 1 less st each time (to 1st before the last wrapped st)
The final row is P10, W&T. You will have 10 central sts and 11 wrapped sts on either side. For the 2nd half of the heel you will work back across each of these wrapped sts, wrapping them again.
K10, k 1st wrapped st (pick up wrap and knit it together with that st), wrap next st (this will now be double wrapped) and turn.
P11, p 1st wrapped st (together with its wrap), wrap next st and turn
K12, this will take you to the first double wrapped st, pick up both wraps (from bottom to top) and knit them along with the st, wrap next st and turn
P13, pick up both wraps (from the front, bottom to top) and purl them along with that st, wrap next st and turn.
Cont in this manner, work until 1st double wrapped st, pick up both wraps from front of work (bottom to top) and work with that st, wrap next st and turn.
Continue until all st have been worked and you are ready to commence working in the round again.