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- Glue
- Beads
- Bead plates
- Iron
- Tweezers, preferably needle nosed
- Waxed paper
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I have these things still so I can still make some sprites or pictures with them.
I work with plenty of gamers, so I'm sure we can get some pretty obscure characters made.
According to Wikipedia they're called fusible beads: http://en.wikipedia.org/wiki/Bead#Fusible_beads
Image: http://en.wikipedia.org/wiki/File:Hama_beads.jpg
I have an instructable on making grid patterns in Photoshop that was featured a while ago:
http://www.instructables.com/id/Cross_stitch_pattern_in_photoshop_with_symbols/