The amazing things you can do using freezer paper! You should be able to find Freezer Paper at any grocery store. It's like wax paper but one side is shiny (ie: waxy), and one side is matte (like parchment paper).
Why use freezer paper to stencil? It adheres to the fabric, leaving your work absolutely clean, and very professional look. It's also cheap!
Materials:
:: fabric (ie: t-shirt, bag, etc; what ever you are stenciling on)
:: freezer paper
:: exacto knife
:: the image you want to stencil (drawn or a computer print out)
:: tape
:: iron
:: paints (either of the following):
- fabric paint
- acrylic paint (with fabric medium mixed in)
- acrylic paint - will need to heat set after stenciling
:: sponges
Find the image you would like to stencil. You can either: print your image directly on to the freezer paper - on the matte side!! using your ink jet printer, or draw the image (onto the matte side), or tape a photocopied/sketched image onto the matte side of the freezer paper. (note: I first sketch my ideas out, then trace it onto the freezer paper..as shown in the image).
Cut the image out using an exacto knife (or small scissors).. I think exacto knives are one of the greatest inventions in this world.
Once your image is cut, place your freezer paper stencil on to your ironed (wrinkle free) fabric. So the shiny side should be down.. right? Make sure the iron is on dry set and iron the stencil on.
Take another piece of freezer paper (the same size as the one you just ironed on), and iron it behind the fabric; the inside of the fabric (shiny side touching the fabric). This helps keep the fabric in place and stops the paint from leaking right through. (optional: you may also place a cardboard inside the shirt to prevent the paint going through to the other side)
Using a sponge dab a thin coat of paint on. Make sure to dab, not brush. If you need another coat of paint or add another colour, let the first one dry all the way through and then dab another thin layer on, etc.
Once you are done painting, and it is completely dry, peel the stencil off. Peel the freezer paper on the inside off. Heat set your image.
Heat set: with your iron on medium tempreture (no steam), iron it inside-out for 30 seconds. Or you can put it in the dryer on low heat, inside-out for 15 minutes. Note: the stencil can not be used again... but stencilling is addictive!
Have fun ..and make sure to come back and share your masterpiece!
At 9:54 AM, 
Sketched Soul
As-salaamu'alaykum wa Rahmatu Llahi wa Barakatuhu my dear Gulnarita :D
haha.. yuppers, that's how I do it! It's as easy or as difficult as you want to make it. So the more detailed and pieces your image has, the more work and patience is needed, but well worth the effort.
Please let me know how it goes, and if you have any further questions, or anything on the tutorial cleared up, please don't hesitate to ask.
Wa'alaykum as-salaam
Lots of Love
Farhana
At 6:06 PM, 
At 9:12 PM,
Wa'alaykum as-salaam wa Rahmatu Llahi wa Barakatuhu my dearest sisters,
Jazak'Allah for the comments.
Blessed Muslimah, I am so with you on what you said. I hope you get to give this a try. And once everything in your closet has your name on..you know it's time to stop :D
Adikbongsu, jazak'Allah. Excellent question. (Although some might use this for baking)..but usually it's Wax Paper (for cakes) and Parchment Paper (for cookies). This here, is a combination of both.
Gulnarita, I have not tried it using aerosol fabric paint, but I agree, that would definitely give an awesome effect. I'll see if I can get an air spray gun and try it out. Jazak'Allah for the suggestion.. much appreciated. I'll let you know how it goes, insha'Allah.
Wa'alaykum as-salaam
Lots of Love
Farhana
Assalamu'alaikum
Looks like fun! i don't think we have freezer paper in the uk, i must admit i've never heard of it. My previous encounters with stenciling ( a very long time ago!) have always been with acetate which is thin clear plastic sheet thingy, i think the advantage of that is you can use it a few times, before you get rid of it. Great tutorial by the way it's certainly made me think of stenciling again!
Wa'alaykum as-salaam wa Rahmatu Llahi wa Barakatuhu my dearest sisters,
Jazak'Allah for stopping by.
JaTM, I thought we didn't have freezer paper here (in Canada) when I first came across this technique..but lo and behold, there is was on the shelf.. so insha'Allah you can find it at your end too. Yes, yes.. before my discovery of freezer paper I used the same sheets you mentioned. Which I still use for stenciling on walls/books/wood/etc. But for fabric, I love doing it this way. I hope you give it a go again.. :)
Maryam, I don't know if that's possible! You try it once, and you'll have do it again :D Insha'Allah I hope you give it try. Please let me know how it goes, and what you decided to add your personal touch too!
Wa'alaykum as-salaam
Love Farhana
At 9:22 PM, futuregirl
At 5:26 PM, Sketched Soul
At 8:30 PM, mutmai'naa
At 5:28 PM, Sketched Soul
As-salaamu'alaykum wa Rahmatu Llahi wa Barakatuhu my dearest sister,
Jazaki'Allahu khair for stopping by!.. I truly appreciate it.
Insha'Allah I hope you get to try it out, it is very fun!
Aww, how I wish you knew about the Fair. I'm a little surprised you didn't know, since everyone around what told.. it was all over Foundation, IIT, etc. Allahu alim. Insha'Allah next time (if there is one), I'll keep you posted.
Wa'alaykum as-salaam
Love Farhana
At 6:10 AM,
Asalaamualaikum,
This looks beautiful & very neat, mashaAllah.
I love many kinds of crafts & other creative DIY. Have done stencilling on fabric as well as walls & doors. I used venyl sheets to make stencils. It worked well. Not tried freezer paper. I really like your design. I've mostly done florals & abstracts.
At 6:16 PM, Sketched Soul
Wa'alaykum as-salaam wa Rahmatu Llahi wa Barakatuhu my dearest sister,
Oh yes, I used to use the same sheets to make my own stencils - and still do for walls, furniture, etc. But for fabric, I found this to be the best.. because if done right, you have perfect, clean lines.. :D
If you give freezer paper a try, let me know how it goes.
Wa'alaykum as-salaam
Love Farhana
At 12:15 AM,
Wa'alaykum as-salaam wa Rahmatu Llahi wa Barakatuhu Anonymous,
Forgive me for the delayed reply.
Humm, how I wish I could answer your question. Try looking for paper that has one side matte (like parchment paper) and one side wax (like wax paper) The wax is what makes it stick to the fabric.
And if all else fails, and you can't find it.. let me know how much you need.. I can mail you some, insha'Allah.
Wa'alaykum as-salaam
Love Farhana
At 3:07 PM,
Wa'alaykum as-salaam wa Rahmatu Llahi wa Barakatuhu dearest Deeni,
Sorry for the delayed reply, I was away for the weekend.
It would depend on the age of the students. I think children 11 yrs and up (with supervision) should be fine.
Even better, see if you can get them this cutter: http://www.crayolastore.com/product_detail.asp?T1=CRA+69%2D8005&SKW=CRAAWARD&subcat=&menu=&hdr=&
Please let me know how it goes if you decide to do it.
Thank you for stopping by!
Take care
Farhana
So that's how you do it. Wow. That looks really simple. I'll definitely try it sometime. Thanks for the generous tutorial!