My sister and I headed down to heatsync labs in Mesa, AZ this morning to try out the laser cutter on some t-shirts!
(By the way? Do you think this is cool? Do you think huge LASERS are cool? Check out this contest that instructables is running right now: http://www.instructables.com/contest/hurricanelasers/
-- Grand prize is a laser exactly like the one we used on this project! My favorite machine in the lab! <3 Enter that contest!)
The effect is really cool, like a lace, except part of the shirt itself. We found that a 5% polyester/95% cotton blend worked best. The polyester seems to melt at the edges of the cuts, sealing them against fraying.
Cotton works as well, but care has to be taken not to fray the edges of the cuts.
See: lace.dxf if you want to cut one of these for yourself!