This is a pretty simple idea really. But I think the results are sort of nice.
Step 1: supplies
a design of some kind
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)