Vinyl Stickers are stickers that are created via a vector image. With a bit of work it possible to create your own vector/bitmapable images, and allowing you to create your own Vinyl Stickers.
Things you'll need-
Photo editing software
Vinyl cutting software
an Image you want to vinyl cut into a sticker
Step 1: Obtain the Image You Want to Use!
I have created a multitude of stickers, but most have been portraits of friends. You, of course can use what ever image you wish. It could be a friend's face or a car! Anything! For my example I will be using a portrait of a TV Show character.
Step 2: Crop the Image!
The next step is to remove whatever you don't want to be a sticker. The first photo in this step is uncropped (the whole image), and it has things I don't want, like the background or the collar of his coat. (Photo 1)
Save that image and get ready for the next step.
Step 3: (Opitional) Black and White
(This is completely optional. You may get better results by performing this step.)
First, you'll want to open the newly cropped image in one of the for mentioned programs.(Photo 1) I used Paint.net for this, so you'll have to google it for any other program.
Secondly, under the Adjustments tab you'll see the option to make the image Black and White.(Photo 2) Click this, let the action complete and you will have a new Black and White image.(Photo 3)
Save the image under a new name, and get ready for the next step.
Step 4: Creating a Bitmap (Vectoring)
Open up Inkscape (Download). This is your new best friend in creating vectored images.
From there you'll want to open up the cropped image that you want to create into a sticker. At the top of your Inkscape screen, you see a tab that reads "Path" (Image 1). Click on that and it will open a drop down menu, and will have an option titled "Trace Bitmap" (Image 2). After that you can tweak the value of "Brightness Cutoff" (Image 3). If you check the box "Live Preview" (Image 3) you can see what the newly vectored image will look like. Play around with this value until it looks acceptable. Once you pick a value hit "OK" and delete the non-vector image. If you are satisfied with the Vector as it is, save it as a Encapsulated PostScript (.eps) via the "Save as" feature under the tab "File". If you wish to edit it further save it as a Cairo PNG (.png) via the same feature as the .eps file. (Images 4 & 5)
Step 5: (Optional) Edit Vector Image
(This is another optional step. If you're vector image didn't come out as you'd liked, you can further edit it.)
Open the vector you wish to edit in Paint.net. From here it's up to you. I filled in some white areas, and smoothed out some rough edges, but you can do whatever you want. Save the file as a .png and reopen it in Inkscape.
Create a new vector file from the edited image, and we can go from there.
Step 6: Graphtec Studio!
First open up Graphtec Studio. Then open up the vector that you saved as an .eps file. It will most likely be far to large for the cutting area. (Image 1) Don't worry! Re-sizing in Graphtec is amazing because it is locked to the aspect ratio, so re-sizing won't mess up how the image looks. I made mine 3" by 5" and you can do so by clicking on the image. (Images 2/3)
After you pick a suitable size, you probably want to cut it out! There is a button in the upper right hand corner that will open the cutter's window. (Image 4) If your vinyl cutter is on and ready, it will say so in the new window. (Image 5) If everything looks good, hit "send to cutter" and it will start to be cut out. (Image 6)
Step 7: Cutting!
If everything is working correctly, when you hit "send to cutter" the cutter will start up. (Image 1/2/3) From here, let the Vinyl Cutter finish working and cut off the piece of Vinyl that was cut. (Image 4)
Step 8: Weeding!
Weeding is a term used when removing unneeded parts of black from the Vinyl sticker. A Weeding tool (Image 2) kind of looks like a thing your dentist would use on you. Use this to peel away any black you don't need. This should leave the original vector file. (Image 1)
Step 9: Application!
First, you'll want to put transfer tape over the weeded vinyl sticker and cut off the extra bits.(Image 1/2) You should then peel off the white back of the Vinyl sticker. You'll be left with just the transfer tape and the vinyl. Place the transfer tape where you want you Vinyl. (Image 3) Be careful!! The Vinyl's adhesive is crazy sticky and once its on and set, that's that.
After you smooth the decal out, peel away the transfer tape. Do this step very slooooooooowly. (Image 4/5)The faster you go, the less likely the vinyl will stick and set well.
Step 10: Done!
Now you are done with creating your very own Vinyl sticker! Enjoy, and post photos of your own creations!
EDIT: Many thanks to Jason Poel Smith for his tip on removing air bubbles. If you take a small needle and puncture the air bubble, then smooth it over with a finger, you will remove the air bubble!