Step 1: Pumpkin Shopping, Permanent Marker
You need a pear shaped, head-sized gourd. It can be shaped like a pear or a lightbulb, as long as it's got a nice round chunk where one might keep one's brains, and a narrower area that might server as a jawbone. Often a pear-shaped pumpkin will be a bit skewed to one side: these are especially good for our sinister purposes.
Pick up the candidates. Recite some Shakespearian Yorick-related verses. Think "skull." If at some point this process gives you either the willies or the creeps, then you've probably found the right pumpkin.
Take it home and rub your hands together, cackling, and bust out your permanent marker.
Draw out your shapes, using photos, toy skulls, or actual skulls if you have them laying around.
Step 2: The First Cut Is The Deepest
Now, scoop out the brains.
It's impressive how skull-ish your creation can look immediately after this step!
Step 3: Think "Planes..."
In "2-D" pumpkin carving, you can just cut out a hole and you're done. But here in 3-D land, you want to finesse it a bit: make angled cuts into the eye as shown in the photo. You'll still end up with a hole for the eye, but the angled surfaces you've created help to set up the other parts of the skull.
Same idea with the jaw: thinking sculpturally, use shallow cuts (you can always go deeper later) which "imply" depth, because they look like they are "in front" of other features.
Barely scrape off the skin on the highest surface of the cheekbone, but dig all the way in underneath it. there is an almost triangular "hole" created by the middle of the jaw (see photo). Again, use reference materials to get the surfaces right.
Step 4: More Planing
Notice: the eye hole in this photo looks kind of odd. Leave it that way for now; the final shape of that hole is where most of it's personality lives, so it's really a "final touch."
Step 5: Start Smoothing
Do that first, then use the dull edge of your knife to press down the pointed edge. Pumpkin cooperates well with this; it smooths right out and looks nice and bony.
Now, do the eye. Slight variations in the shape of the eye really affect the skull's "attitude," so carve carefully. Shoot for either good symmetry, or extreme asymmetry; anything in between sends a muddled message.
Step 6: Finish, and Display!
If you peel it all off, nobody can tell it's a pumpkin... if that's one of your goals, so be it. Otherwise, I suggest leaving a bit of skin, stem... it's a few notches more disturbing that way.
Make a stand with a CD/DVD spindle, some crumpled plastic bags, and some black duct tape.
Or dangle your skull from a wire.
Or, place it on top of your complete skeleton.
Candles don't do much for it really, but that conventional pumpkin technology works too.
I've had these decay in a few days, and last a year when dried properly...