These ornaments are surprisingly simple to make without a lot of special equipment. I used a drill press and belt sander, which I recommend it they're available, but really the only specialized tools you need are a glass cutter and a glass drill bit.
Step 1: Stuff Ye Need
-Scanner mirrors. These are the long, thin mirrors that reflect the image from the scanning head down to the CCD or CMOS or Polaroid or whatever it uses. They're front-surface, which makes them very shiny on one side, but also relatively shiny on the other side. Shiny is good.
-Hanging things. I just used a bit of fishing line, but you could also use thread, paperclips, twist ties, whatever works for you.
-Glass-cutting bit. You can probably get expensive ones if you feel like wasting money, but I used a 1/8" spade-point bit from an $8 Harbor Freight eight-piece set. These spade bits are basically a little spear of pure tungsten carbide, making them very very very hard, but also somewhat brittle and prone to heat problems. We'll address that later.
-Drill. Drill press if at all possible, it will help keep the pressure constant and the angle straight.
-Sanding thing. I like mah belt sander, but a bit of sandpaper and a block of wood works too.
-Glass cutter. Again, there's lots of different ones-mine is something similar to this $2 tool, also from Harbor Freight.
-Combination square. Make your cuts purty.
-Old mousepad. It's a big square of neoprene, which is excellent for supporting the glass while drilling it.
-Liquid Coolant Dispensing Device. I like a spray bottle filled with a 50/50 mix of rubbing alcohol and distilled water...it acts as both a cutting fluid and a glass cleaner.
-Lintless rag. Save the Shiny!
-SAFETY GLASSES. WEAR THEM.
Step 2: Cut and Smooth the Glass
Use one hand to pull the mirror against the square, and position it somewhere that looks like it ought to be cut, don't try to measure, it's art. Position the glass cutter on one side of the mirror, press down HARD, and drag it across to the other side. You should hear a slight crunching sound as the cutter grinds a thin line in the surface, and you should see a visible line. If you don't make it all the way across, be very careful to line it up exactly when you try again to get a clean break.
Place the mirror along the edge of your table/desk/workbench so that the scored line is lined up with the edge. Hold the overhanging edge, and push down firmly. The glass should pop off cleanly, and you get to feel proud of yourself for having conquered the Dark Forces of Crystalline Silica.
There are now sharp edges where you cut it. Sand those off, being careful to not jam the sharp edge into the sandpaper and gouge it. I decided to wear my Super Strength Rubber Gloves for this bit, which protects me from sharp edges and gives a better grip.
Step 3: Drill a Hole
I'll just be giving a basic overview, because it's not as hard as it seems like it ought to be. If you want more information, check the interwebs.
Put the mirror on the mousepad for cushioning and support. Line the thing up on the center of the mirror, and down a bit from the top. Then drill a hole. Maintain some pressure on the bit, but not too much, and keep it even. You'll know you pushed too hard when the top of the mirror breaks off. Be sure to keep spraying water on the hole as you're drilling to provide lubrication, cool the bit, and hold down the glass dust.
It doesn't splinter out much if you just drill all the way from one side, but I liked to drill through about a third of the way, then go in from the other side. I didn't measure the hole, I just looked at where the hole was through two edges to line up the bit. It worked pretty well, and cut the splintering even more.
Step 4: Hang It Up!
This is where the lintless rag comes in. Carefully polish both sides of the glass, and handle it by the edges to keep your grimy hands off the pretty parts. When I hang these on the tree, I might even wear latex gloves.
Aim to get it somewhere with lots of lights for maximum reflective power. This would be really cool using a string like my late grandmother always used, which had tiny gearmotors in the line that would spin ornaments hung from it. I can't find them online anywhere, though, and we only have the one string. EDIT: half an hour after publishing this, I discovered at least one place you can get them. I'd forgotten that they actually just plugged into the light sockets.
Merry Christmas, Happy Holidays, whatever your politically correct greeting is, and WEAR YOUR SAFETY GLASSES!