I've recently been exploring the amazing world of T-shirt design and printing.
All you really need is Adobe Photoshop (Adobe Illustrator is optional) and a place to print your shirts.
After searching the web I found a place that could easily print my shirts for me and even allow me t sell them to others without me having to do anything.
This is the website:
www.shirtcity.com

I've been working with this website for about a year now and have never had anything but good experiences.
So, on to the real instructable in which I will describe every step of the process...

Note: This instructable will not teach you how to use photoshop, it is based on the idea that readers already master PS to a certain level (not a very advanced level though)
So just read some tutorials on the pen tool and layers on such and you'll be ready =)

P.S. This is my first instructable, hope you like it =)

Step 1: Getting Ideas

The most important step in the entire process.
If you don't have an idea, you can't design anything now can you?
I get ideas when I hang around with friends, see cool designs on posters or shirts or generally when weird things happen to me (which they do... a lot...)
Just look around and when you get an idea, try to write it down or try to make sketches so you won't forget.
Designing something for a group of friends is always a nice starting point and exactly what I will be doing for this instructable...

Step 2: Get Your Ideas Together and Do Some Image Research

So now you got a general idea of what you want to do.
I for instance want to design a cool, shield based, logo for me and my friends. Three are studying to be a doctor and two are studying to be engineers (me! ^_) so that gives me some options.
You most often want to get some meaning into your design so find symbols that are characteristic for your design's subject.
This is (naturally) extremely customized to each design so just let your imagination run wild.
My ideas here were to use our colleges logos and incorporate them into a shield, so images I found were the following:
-The snake that's circling around the tree for our doctors
-The Delft University of Technology (which is both mine and my other friend's college) flame which is part of the logo.
-A knights templar shield of which I really liked the shape (might adjust it a bit though)

Step 3: Sketch!

To start out, do some sketching on paper.
I'm not that great an artist and neither need you be.
It is always a good idea to do some work on paper first so you can get an idea of what you're going to make. It'll give you a good idea of what you're going to do in Photoshop and is also a lot quicker than Photoshopping the entire thing.
My idea was to make the snake wrap around the shield and have the TU Delft flame hover above the pointed top of the shield.
I'll put the letters SI on the shield which stand for Sudden Inspiration which has sorta grown as the name of our group.
Don't worry if your sketch looks a little crappy, it'll probably straighten out in Photoshop

Step 4: Digitizer Engage!

So start up Photoshop (or Adobe Illustrator) whatever you prefer...
In this instructable I'll assume you know how to deal with Photoshop and I'm not going to teach you that.
Let's just say there's millions and millions of Photoshop tutorials all over the web, just google it.
I'll be making a vector drawing, so as long as you know how to handle the pen tool and layers you'll be fine.
So let's get started!

Step 5: Get Started

Open up a new document, since it's a vector drawing we're doing (a vector drawing can be scaled without really losing quality) 800x800 should be fine as a size. You won't be needing a background but working on a on a white background is pleasant so let's keep it. Now open up your primary source image and paste it into the Photoshop document which will look like image 2 (note how I scaled down the opacity as well, this is done in the layer tab on the right side of the screen. We'll use this in the next step to get a general outline of the design.

Step 6: Start the Primary Outline

Start up your pen tool and approximately trace the outline of your shield, you might want to edit it a little to your own liking... You can open up the grid tool to get it all nicely shaped up. (view->show->grid)
Put the opacity of this newly formed layer to 60% or something so you can still see what you are doing.
If you are doing a design that should be symmetrical, only trace half of it so you can later duplicate and mirror.
(If you duplicate and mirror, copy and paste both shapes so they are in the same layer. Use the path selection tool (black arrow) to combine the two shapes (in the top of your window) so the two halves are combined in one shape)

Step 7: Start Adding Detail

From now on I'll just show you what I did to my logo because it'll be really varied for each design. Just use common sense and ALWAYS keep the printing process you selected in mind.

I will now add the edge to the shield, It'll be a black edge surrounding a grey shield. First make the main layer black. Then duplicate the shield layer and make it gray. Use edit-> free transform to scale the gray layer to 90% and move it around using your arrow keys until you like it's position.

Step 8: Keep Adding Details

Keep on adding details. Try to work in an order that'll help you keep everything organized. I added the flame first, then added the I, then the S then the snake.
I added the flame first because it didn't really influence the rest of the design. Then the I because it allowed me to practice freehand lettering (which I'm not experienced at, and the I is a simple letter) and I added the snake last so I could make sure it didn't go over a vital part of the lettering without having to go back and change things.
When designing, try to keep stuff like this in mind.

Step 9: Upload the Design to Shirtcity

Now that your brand new design is finished you can upload it to shirtcity.com
Create an account, create a shop, and buy your own designs or even sell them to friends!
This, for instance, is my shop:
My shop at shirtcity

Have fun and perhaps, one day, you will be the next Paul Frank ;)
Have fun and be creative!

Step 10: Optional Extra Step

Shirtcity has a system based on shirtcity dollars.
You gain an amount of shirtcity dollars everytime you sell 2 shirts, and uploading a shirt costs dollars.
To reduce the amount of shirtcity dollars you have to pay for an upload it is best to upload it in the .ai format.
To save your design in this format, open it in adobe illustrator and save it again. That's all...
Have fun ;)
Hope you all liked this instructable.