I made this necklace for my girlfriend, using the laser cutter at TechShop, San Francisco. It was a really simple first project and, after one bad cut, I got a result I was happy with. The cedar has a lovely smell and a nice purple sheen, which doesn't come out so well in the picture.

Materials/equipment:

Laser-cuttable wood. I used LaserBits aromatic cedar plywood. I've heard stories that cedar on its own is very hard to laser-cut so best to stick to ply unless you know what you're doing.
200-grit sandpaper for finishing.
Optional: oil, for finishing. I used some safflower cooking oil and it seemed to work fine!
One length of waxed cotton. I used brown, 1.5mm cotton that I bought on ebay.
One clasp. I used a magnetic clasp, also found on ebay.
Laser cutter. I used an Epilog 60W machine. Even the plywood cedar is pretty hard to cut on that machine so YMMV if you have a lower-wattage machine.
Vector drawing package. I used Inkscape and then transferred to CorelDraw, which is what's attached to the laser cutter.

Step 1: Designing the Pendant

Using Inkscape, to draw the outline (which is the cutting line), I

set the document size to the size fo the laser cutter bed
turned on a 1mm grid
freehanded half the butterfly, using the grid only for the endpoints
copied and flipped the half-butterfly
combined the paths
added a circle for the loop at the top
using the grid to line it up, added a circle for the hole in the loop
combined the larger circle and edited the path to make it all join up.

Then I cloned the shape and edited the path to make the inset, which would become the etched area around the edge.

Finally, I cloned the outer path again and combined it with the inner so that I could fill the space between them and sett he outline of the shaded region to none.

Step 2: Laser-cutting and Redesign

I transfered the SVG file to CorelDraw for laser cutting and

etched the filled region first, using the option "raster only" to make sure I didn't accidentally cut
then, I deleted the filled region from the file and did the vector cutting pass. IIRC, I had to use power 100%, speed 10% on a 60W laser cutter.

The first try turned out OK but areas where two lines passed close together ended up getting very scorched. Easily fixed by adjusting the paths to remove the sharp corners.

Step 3: Finishing

The pendant came out of the laser cuter with a bit of soot on the edge so I sanded it off. (I've heard that hydrogen peroxide works well for this as well.) I also sanded the surface a little to smooth it up.

Then, I applied a little bit of oil with a kitchen towel.