I made this costume shortly after seeing the movie "Alien" for the first time.
Step 1: Acquire the t-shirt you want to use, and a Alien Chestburster Plush (available at www.thinkgeek.com)
Step 2: Cut the little guy in two right about where his body turns into more of a tail. Take out some of the stuffing, but leave some in his face area.
Step 3: Place the open end of the de-innarded onto the middle chest area of your shirt. Trace around the circumference of the body.
Step 4: Cut along the traced line.
Step 5: Sew the little guy's back end onto the hole. Or get someone else to do this part.
Step 6: Apply fake blood generously.
Step 7: Put on the shirt. Carefully put the arm you wish to puppeteer with into the sewn-on-puppet's body, make sure not to rip the stitches. Have someone put a jacket with pockets on you, leaving whichever arm you are puppeteering with to puppeteer. (or do it yourself if you're especially talented). Get the other person to stuff whichever jacket-arm is limp with a towel or something of the like, and stuff the towel-arm into the nearest jacket-pocket. Now you should be able to use one of your arms freely, and the other to puppeteer 'bursty, with a semi-realistic fake arm at your side. Phew. I hope that made sense.
Step 8: When finished, keep in mind to fix your hair for pictures. I forgot to do that, as you can see.