We describe in detail how to implement a coarse-grained hybrid molecular dynamics and stochastic rotation dynamics simulation technique that captures the combined effects of Brownian and hydrodynamic forces in colloidal suspensions. The importance of carefully tuning the simulation parameters to correctly resolve the multiple time and length scales of this problem is emphasized. We systematically analyze how our coarsegraining scheme resolves dimensionless hydrodynamic numbers such as the Reynolds number Re, which indicates the importance of inertial effects, the Schmidt number Sc, which indicates whether momentum transport is liquidlike or gaslike, the Mach number, which measures compressibility effects, the Knudsen number, which describes the importance of noncontinuum molecular effects, and the Peclet number, which describes the relative effects of convective and diffusive transport. With these dimensionless numbers in the correct regime the many Brownian and hydrodynamic time scales can be telescoped together to maximize computational efficiency while still correctly resolving the physically relevant processes. We also show how to control a number of numerical artifacts, such as finite-size effects and solvent-induced attractive depletion interactions. When all these considerations are properly taken into account, the measured colloidal velocity autocorrelation functions and related self-diffusion and friction coefficients compare quantitatively with theoretical calculations. By contrast, these calculations demonstrate that, notwithstanding its seductive simplicity, the basic Langevin equation does a remarkably poor job of capturing the decay rate of the velocity autocorrelation function in the colloidal regime, strongly underestimating it at short times and strongly overestimating it at long times. Finally, we discuss in detail how to map the parameters of our method onto physical systems and from this extract more general lessons-keeping in mind that there is no such thing as a free lunch-that may be relevant for other coarse-graining schemes such as lattice Boltzmann or dissipative particle dynamics.