Phil @ MAKE has a great story on T-shirt designing.
benjiwenjifoofoo writes –
All you do is go to Target or wherever there are plain colored shirts for sale. Then you get a stencil. You can cut out text printed out from your computer, or lay odd shaped objects on the shirt like a doily (as in the first picture) or an Abalone board (as in the second) then spray a 50/50 bleach/water solution on it and watch as it changes color. When it gets bright enough you throw the shirts into the wash alone with just a tiny bit of soap.
cre.ations.net – Creation: T-shirt designs created with stencils and bleach – Link.