I was inspired by a vlog on Youtube called The Fashion Citizen to shred my t shirt into bits. They have other great tutorials so check it out.
http://www.youtube.com/watch?v=A9UYTY3AgGM&list=UUmVNomVEhtUBbAjc006rtDA&index=34&feature=plcp (link to the project on Youtube)
This is a fun project but I warn you it can be very long. That is why it took me 2 days and a half to completely shred most of the back of my Jack Daniels t shirt. It can be quicker if you decide to shred smaller parts of your t shirt or if you aren't a slow coach like me :P
First you will need to cut above the hemline of the shirt and make a small hole. Don't make it too big as this is where you are going to shred and if the hole is too big then it is going to be harder to control the shredding.
As soon as you have finshed making your small hole you can now start to pick the fibres of the t shirt with your fingers. It should end up looking it does in the picture (sorry if it's too blurry)
One you have started to get the hand of picking the fibres your t shirt should start looking like this.
Have fun and shred away.