For this instructable, you're going to need...
1 x-acto type of bladed cutting tool.
A roll of contact paper.
Discharge paste. It's like a gelled bleach used for removing color from fabric.
A steam iron
Sharpie or other comparable marker
Wooden table or other safe-to-cut on material.
IMAGINATION. (cue epic horns and trumpets)
Step 1: The Drawing Part.
Draw whatever you want, but keep in mind that you've got to place all the random little "islands" on the shirt when you're done. I chose something simple. A beard. I promise it will make sense when this instructable is over. Also, draw it on the shiny plastic side. If you want to do words, do words. You won't have to reverse them or anything.
When you're done drawing, cut it out with your trusty crafting knife. Peel away the layer of plastic from the paper and stick it down on the shirt. Make sure it's flat and there are no bubbles around the edges.
You can tell I messed up a few times. It's alright. It really has nothing to do with the final result.
Step 2: The Discharge Paste.
Take your magic wand OR trusty paintbrush and start "painting" it on.
Feel free to give it a few coats. It'll take a bit longer to dry, but it will give a good, uniform aged yellow look to the shirt.
Step 3: Finishing Up.
Once the paste dries, you peel off the plastic and hit it with a steam iron on FULL SPEED AHEAD. Or the highest setting. Your choice.
As soon as you hit it with the iron, you can see the color leave the shirt. It's pretty neat how this stuff works. It also doesn't damage the fabric.
So just iron normally and if you miss a few spots, hit it with more discharge paste and then let it dry, and iron it again.
Also, if you'd like to speed up the drying process, use a hair dryer on SUPER POWER MEGA ULTRA HEAT.
Step 4: Springer's Final Thought.
Now that your shirt is done, just wash it regularly. The fabric will feel soft again and look faded, and depending on the design, you can make stuff look old and worn. I just made a simple beard for this instructable. AND TO ROB BANKS.
Not only is it a beard on a shirt, it's an instant robbery disguise. Nah, not really, but it is super amusing to pull it up around your head when you're around your friends.
Thanks for reading, and remember, knowing is half the battle. The other half is creativity.