Step 1: Materials Needed:
Paint(I use acrylic, whatever works on fabric should work for you)
Some sort of brushy thing
Something to stencil
Step 2: Stencil
One of the great things about freezer paper is that you don't have to worry about islands. Since you're ironing on the design, you can just place any white bits that aren't connected to the main part of the stencil. This is a good thing, as my stencil is sloppy and has a lot of islands. You can also iron on corrections if you mess up somewhere while cutting it. The downside to this is that most freezer paper stencils can only be used once, but if you're careful and don't use islands you may be able to peel it off intact, though it probably won't stick again.
Hokay, so: now, you either have your fancy smancy stencil drawn, or ready to print onto freezer paper. You can probably buy freezer paper at a market or maybe an art store or some place like that. I'll bet the Reynolds company makes it, I don't know what it's actually used for, there's a roll in my house and I stencil with it. Anyways, whatever you do, make sure your stencil is on the plain side of the paper, with the waxy side down. WAXY SIDE DOWN.
Step 3: Knives and Hot Irons
Heat up your iron, and lay out your shirt. While you're at it, you might as well iron the shirt so it's super smooth. Position the stencil on the shirt, waxy side down, placing any islands in their respective positions. Now press the iron flat down on each section of the shirt for a good 10-15 seconds. Poke the paper to make sure it's firmly on, you may have to go back over it, but the better that stuff sticks, the crisper the lines will turn out.
Step 4: Pretty Paints
As far as drying goes, you can stick it in the sun or under a lamp or just leave it overnight. When the paint is dry to the touch you can pull off the paper. I usually give my shirts a day or so to dry completely, then I turn them inside out and toss them in the dryer for about 15-20 minutes to cure the paint. I'm not entirely sure that's necessary, but I'd definitely wash these shirts inside out.
Step 5: Finis
And I might as well tell you to listen to sheena. I'm not sure what they are, electronic andogynous post punk or something. If you like the faint, !!!, or dfa1979 give them a listen: http://www.myspace.com/sheenaisgay