Step 11: Additional information and recommendations.
I've also published an instructable over how to transfer embroidery patterns, which should be useful if you're just starting out!
To create a pattern, you can draw on the fabric (there are water soluble markers!), or use iron on transfers or carbon paper to copy a design onto the fabric. (There are two examples of iron on transfer patterns below - they're from Sublime Stitching. :D)
You can get many free patterns online - I use http://blog.craftzine.com/ because they link to a lot of them!
As far as shopping for supplies and patterns, you can check your local craft/sewing retailer or try these websites:
http://www.sublimestitching.com/ - They have great beginners kits!