The first part of understanding Roman numerals is memorizing how the letters correspond to Arabic numerals. Teach your child that I is 1, V is 5, L is 50, C is 100 and M is 1,000. Once the child has memorized these, you can then teach him that when he sees these letters in a string, it means that he should add them up, so that III is 3 CL is 150 and MM is 2,000. At this point, avoid the more complicated Roman numerals, like IV and XL.
When your child understands that she must add the numerals together, explain that there are some that she must actually subtract. When the Roman numeral in front is smaller than the second one, she must subtract that to get the value. For example, IV is 4 and XC is 90. She might start to wonder whether she could write IIII to mean 4 or IIV to mean 3, so explain that the subtraction rule only works by subtracting one value less than the one it's next to. For example, she can't wright IC to mean 99.
For practice, give your child examples that he has to translate. You might start with a list of Arabic numerals that he has to switch to Roman, or do it the other way around. If you have more than one child, have them compete to see who can do it fastest, which should be a fun activity. The numerals up to 10 are probably the most important for use in the real world, so if your child is getting frustrated with larger numbers, you may want stick to the shorter ones until later.
Relating the Roman numerals to the real world may encourage your child to take more interest in the activity. Ask your child to point out where she might find Roman numerals. Common examples are on a clock, in the titles of movies and on the markers for historical monuments. When she encounters these types of examples, have her translate the numbers.