The main reason I chose to make my own folder is because most of the nicer ones you find on the market nowadays are over 3" long or are a bit too wide to fit comfortably in "girl pockets" (if you've never experienced them you have no idea how lucky you are). Plus I figured it'd be a nice challenge.
**Note** Please make an effort to read the annotations, I think they're more helpful than the formal instructions.
Step 1: The Design
Remember that you need to leave room for standoffs or a backspacer while the blade is in the closed position (see last pic). Also you should put a fair bit of care into figuring out the placement of the pivot and adjusting the blade length accordingly. If the pivot isn't aligned properly you're liable to end up losing a lot of blade and handle width by trying to correct it (or you could turn the misalignment into a "feature").
Step 2: Cutting out the Scales
I used some 1/8" hardboard we had lying around, but anything should do (real wood, acrylic, platinum, unobtanium, etc.). I just traced around the template twice, cut out both pieces with a bandsaw (a coping saw or even a hacksaw would do just as nicely), and held them together while sanding the edges smooth for nice crisp lines.
At the end I took just a bit more out of the choil area on the left scale to help with ergonomics and releasing the lockbar (but that would only apply to the real thing).
Step 3: The Blade
Step 4: Assembly!
Now comes the moment of truth. Using a rod or dowel as the pivot, rotate the blade to the closed position and check the fit. In my case, it came out perfectly!
Step 5: The Standoff (nope, not a mafia movie)
Step 6: Whaddya call a good-looking thumb? A thumbstud! (I can hear the crickets chirping)
Step 7: Stop! Hammer time! Or, well, stop pin time. (part 1: the closed position)
Now this is a bit tricky to explain, so hopefully the pictures will help. You want the stop pin to rest in a semicircular cutout in the blade. Mark the bottom of the blade (when positioned exactly where you want it to be in the end), and mark where the pin will go. I suck at explaining, so please look at the pictures (and feel free to leave comments if it still makes no sense, I don't blame you).
Step 8: Stop! Part 2: The open position
See annotations for details about what's going on.