A bath of canola oil is ideal for keeping the plastic bags at a temperature where they will become tacky and malleable, but not completely melt and produce fumes.
Create a double-boiler by nesting one non-stick pot inside a larger pot, and filling the space between them about 2/3 of the way with canola or corn oil. Since the smaller pot will float in the oil, you'll want to secure it. I used stainless steel wire attached snugly to each pair of handles.
For a uniform finish, use bags that are the same type of plastic. I used #2 HDPE (high density polyethylene). This is the material used in the majority of disposable supermarket bags, though sometimes you'll find #2 LDPE (low density polyethylene). Either one will do; just make sure you don't mix the different types.
Ball up a bunch of bags in your hand and cut them with a pair of scissors. The pieces don't have to be super-small, just enough so they don't get tangled up with each other during the heating process.
Heat the oil bath and ready your materials. I used a plastic bag full of shredded plastic bags, and used a paint mixing stick to stir. I recommend using a wooden implement as metal may become too hot and stick too much to the plastic.
FIll the pot with plastic pieces and stir continuously. You'll find that the plastic will quickly shrivel and form into a ball. Periodically spread out and break up the ball to encourage even heat distribution.
Congratulations! You now have a point-of-use recycled piece of plastic stock with which to fabricate DIY projects. The advantage of this over the old "stewing" method is that you no longer have to worry about constant greasy residue, and the natural marbling of the plastic bags can make for interesting textures in your designs. Good luck!