I put the original version together in about a half an hour, and played with it for way too long to admit. Eventually it got tore up, and now I've decided to create a new and improved version. This new version boasts some new features, almost all of which are designed to add distance. Starting at the nose cone, it now allows for retractable rubber bands. This will also allow multiple rubber bands to be used where it created too much instability in the original design. The new body is a bit longer, and I figured out a way to help trim down it's circumference a bit and keep it rounder than before. The tail fins are also much larger now to create more spin and ultimately more stability. Finally, per a user comment I now also have a tool to launch the rocket with to avoid accidently thumping your finger on occasion.
Step 1: Build the Nose Cone
To get started, we'll begin with the nose cone. Cut off the neck of the bottle, leaving as much of the straight section in place as possible. Next, unscrew the cap and drill a couple of small holes (the size of the paper clip) near the top on two sides. I didn't have a drill handy, and used a small leather punch in place of the drill for now. First, remove and save (without destroying) the sealing ring, then go ahead and put the paper clip in place and screw the lid down tightly. Then you can mark the raised section of the neck for two more holes to keep the paper clip in place. Unscrew the cap and make your holes. Finally, make a hole large enough on top of the cap for at least a couple of rubber bands to fit through.
Now it's time to put it all together. Take the paper clip out, and put the rubber band(s) on. The strength, quality, and number of rubber bands you use will make quite a difference on how the rocket performs. This design is a little heavier than the original, and needs a little bit more power to fly well. The paper clip on the inside keeps them from falling down into the rocket later on, and you'll be able to dig them out with the launcher (built in the next step) if needed. I placed a golf tee under them so they wouldn't fall back through. I had to use a pair of needle-nose to get the paper clips forced through the holes further down the neck, but that will keep it from falling out. If you need to replace the rubber bands later, it's probably just best to also replace that paper clip.