Grab your shirt, flatten it out on an even surface. Decide on a neckline and draw it on with chalk. You can make a template for that or just draw free-handed.

Cut out the neckline ( and the sleeve seams, if desired ).

Measure the middle of the shirt and mark it with 2 needles through the front layer, one on the neckline and one on the lower seam.

Grab the front by the needles and flatten the sirt so you have a fold that is exactly the middle of your shirt.

Grab a pair of really sharp scissors and make little cuts along the middle line! You'll want to make an uneven amout of cuts, that's important. Make them a little less than half an inch wide, the space in between them is up to you.

Take your second material. This can either be a strip of contrasting shirt fabric, pulled into a nice string. Or you could use satin ribbon to get a more chic look. I'll do that another time...

Wave it through the loops, I think that's pretty self-explanatory if it goes along with the picture. Tie off in a bow. Snip the ends if desired.

You may do the same thing to the upside of your sleeves, which is what I did. But this time, I thought it would look better to weave it so that the knot would be not on the shoulders but on the ( non-existing ) seam, plus, I did not tie a bow on the sleeves... it was kinda too much. ^^

There you have it, a quick and really, really cute shirt. :)
You could paint stuff on it afterwards... The girl that did the original tutorial splattered paint all over and it looked awesome...