Wash the bottle caps with water and soap and let them dry well.
After they're dry, flatten the caps using pliers to bring out the edges. Use a piece of fabric to protect the cap from scratching.

*Note*: I've seen somewhere that you can also flatten a bottle cap with a hammer. I don't recomend it, it'll ruin you bottle cap (at least it ruined mine). If you can do it successfully with a hammer, that's fine too, though I much prefer this way.

This is what they should look like.

Paint your bottlecaps according to your taste. I used a chrome spray paint (spray paint will give a smooth, uniform finish). Paint both sides and allow to dry.

String some small pearl beads. String as many as you nedd to go around the edge of the bottle cap.

This one will be hard to explain. I didn't want a knot to be showing, so I tucked the loose ends of the strings back into the beads chain with the help of a needle, in the opposite direction.

The red dot shows where the ends meet and how I tucked the string into the beads.

Cut off excess of the string, and voilá!, perfect knot-free-circle-beads-chain-thingy!

Glue the beads to the bottle cap, as shown.

Cut a 6 cm/2,5" piece of ribbon and glue each ends to the inside of the bottle cap, as shown.

Cut two 2,1cm/1" diameter circles out of your pictures/whatever you want to be in your locket (I used a pretty magazine page and hand wrote my personal motto - "tempus omnia dabit") and glue them to inside of each of the caps.
Then apply a thin coat of white glue to the images and allow to dry. This will protect the picture from water damages. If you want them to look all glossy and shiny, apply a coat of clear nail polish on top of the glue coat.

close your locket and make a small stitch with needle and thread as shown in image (it will prevent the locket from falling off the chain). Add any embellishments you like. I glued a button on the front.