Step 1: The Pegboard
The Pegboard is your friend. It lets you take an 8-bit picture and turn it into a tangible object. In a nutshell, it lets you place beads in a pattern and fuse them.
Step 2: The Beads
If the pegboard is your canvas, the beads are the paint. Once placed in their desired location on the pegboard, you can cover them with wax paper and apply an iron to fuse them. You are not confined to the normal colors of the image, though...
Step 3: The Result
BUDDER GEM!!! That is all you need to know about perler beading. All supplies can be found at IKEA.