You'll need an old couch that's getting a bit ratty (or a nice one that you absolutely can't stand).
And you'll need some wall paint (I used cheapo Walmart interior paint for this one).
My applicator of choice is a small roller.
Step 1: Almost done
You don't want too thick of a coat since that will make the fabric feel too thick and starchy (It's going to feel a bit stiff anyway). A roller will put a nice coating on the fabric without getting a heavy layer on. I use small rollers since they will get into the folds and nooks of the fabric more easily.
But I'm getting a bit ahead of myself - first things first. Test the fabric on a patch that won't show. Some material isn't suitable for painting -- some couches are just foam with a thin cover. One friend painted a foam couch and it soaked up a gallon of paint before she figured out that it was never going to dry. I used less than half a gallon of latex wall paint on this couch.
Step 2: Ready for life in the basement
I've had good luck painting other cloth furniture. For smoother fabrics, you can take other colors and add to the scheme. I like to dip a big roller in paint and just make criss-cross marks over a more neutral or solid background by pressing the paint on the fabric, but not rolling it in.