Step 1: You Will Need

Clearly when I needed a place to grow rosemary, this was the most logical approach...

You'll need:
A hanging basket liner (I used a coconut one)
Packet of Popsicle sticks
PVA glue
Brown and green paint
Mod podge (optional)
Paintbrush
Heavy duty scissors
Potting mix
Plants
Decorative stones

Step 2: Building the Door

This is probably the most boring part.
Lay out Popsicle sticks as shown.
Using dots of PVA glue, place other sticks across to secure in place.
Allow to dry.

While you do this, cut the rounded ends with the industrial scissors off other sticks in approx 2cm lengths. I found they shattered if I did smaller...

Step 3: Paint the Door

I found using a dry brush and planting the door roughly with brown paint along the joins worked really well.

Then using green paint, cover the whole door with paint.

Using a tissue, wipe excess paint off the door.

You can carve the mark left by Gandalf in this step if you wish.

When dry, apply mod podge. (Optional)

Step 4: Attach the Door

Cut a hole in the liner with the scissors. Start small and make it larger. Mine is about 10cm in diameter.

Apply copious amounts of PVA glue to the inside of the hole. Lay the door on the hole, green side facing outwards. Apply a weight such as the container of decorative stones and allow to dry overnight... Preferably without the puppy dragging the thing off the table and having to re-do this step.

At this stage, cut an X on the top of the upturned liner to put the rosemary (or other herb) inside.

Step 5: Attach the Bits Around the Door

Using the short pieces you cut, glue to the outside of the liner/door hole when the door is firmly attached.

I of course decided to glue before painting... By all means do the logical thing and paint the thingies brown before glueing on.

Step 6: Planting!

Take the hobbit hole outside, and weed a patch of garden. Place the liner on the ground.

Trowel potting mix inside the X hole you cut in the now-top-of-the-hill. This will take a while. When about 3/4 full, take the rosemary (or other plant) and plant inside the X. Trowel extra potting mix in and around the plant.

I chose to Kant decorative grasses around the hobbit hole- to keep it sturdy in place in the garden.

Water the hobbit hole gently until everything is really wet.

Step 7: Final Touches

Lay a path of stones leading to the hobbit door.

I also made a wee bench seat and a sign from Popsicle sticks (but as they look better in the picture than real life, don't expect an instructable on them. You could just steal one from a doll house...)

Enjoy. And hope that the husband doesn't think you have finally gone too far with fandoming the house.... :D