I feel that it is my Pinterest duty to tell you that THIS is the only method that really works for transferring an image to wood that isn't absurdly difficult. Trust me, I did the legwork.
Garden stone mosaic
Made from one of daddy's old shirts
How to make NO SEW curtains using burlap--$7.00 per panel!
Recycle an old apron into a car organizer! More creative uses for old clothes from @FamilyFun magazine: http://www.parents.com/fun/arts-crafts/kid/get-creative-with-clothes/?socsrc=pmmpin130109cCreativeClothes#page=3
DIY Bathtub toy organizer made from a terry cloth towel.
Hanging basket toys organizer felted bag white green by AgnesFelt,
Super cute and practical play room. I need a play room... and a house.
Bookshelves on their side make great benches with storage underneath. Maybe we could do this on the hallway side or under the big window?