Back in the 80's we used power tools to distress the denim. I recommend a sandblaster and/or a belt sander. If you're going for the fully ripped look, use a seam ripper or a razor to make horizontal slits across the legs every inch or so. Ideally, use the seam ripper to start the cut, and then just rip it until it's the width you want. Then wash several times, as Re-design suggests. Further sanding also helps to fray the edges to avoid that just-cut look.