Step 1: Supplies
something to cut wood with, how about a 10" miniature table saw from MicroMark! Yay! I love this thing. My new favorite tool.
watercolor paints (or prismacolor pens)
two cups of water
can of shellac or other finish
soldering iron or wood burning tool.
safety goggles (to keep the smoke out of your eyes)
Step 2: Draw on wood
Print your design out in mirrored form. Trace over the lines heavily with pencil.
Turn the drawing over and tape it into place on the wood surface.
On the back of your drawing, scribble heavily with pencil or burnishing tool. This will transfer the pencil lines of the drawing to the wood surface.
Remove the paper and trace over your drawing using pencil in any spots that did not transfer well.
Some other instructables that discuss different ways of transferring images to other surfaces:
Step 3: Etch the design into the wood
Trace over all the lines of your design slowly with the soldering iron to create a bold deep line.
At first I tried an actual wood burning tool but I found that it took way too long to heat up and got way too hot to handle after a short while.
The soldering iron heats up quickly and you can work with it for longer periods.
You'll want some goggles to keep the smoke out of your eyes. It smells nice, but it will dry your eyes out if too much smoke gets in them.
Some other instructables that discuss wood burning: