First of all: the amount fabric. It all depends on the size of the garnment you want to end up with. Mine turned out a bit too short, but too wide. Mark your rectangle, taking into account that the entire length will be twice of what you want it to become. Make it as wide as you are comfortable with.
To test the fabric, fold in half. That way you get a pretty good idea of how wide and long it will turn out.
Which fabric to choose? Pick whatever you want. I made it with jersey, that way it stretches a bit. You could also make it in a sheer fabric or even wool.
Second step: fold the fabric in half, lengthwise. Thus you have a rectangle again, but normally it should be 1/2 of what you had. Position it the right way, i.e. with the fold facing up.
Now, starting at the fold, mark the middle of the fold. Cut out a semi-circle for your head. Depending on what neckline you prefer, go slightly more oval or keep it round.
Third, hem all sides, including neckline. You can also use bias tape, which I didn't have at the time =) If need be, you can also use an interfacing fabric, to strengthen the neckline.
Put on the shirt en decide where to make armholes. You can now either pin the sides together from right under your armpit all the way down to the hem or just pin it together with a few stitches and leave it at that.
Wear like this, with belt or whichever way you like! =)