I used the Silhouette Heat Transfer Vinyl for the hands and wording (okay, so I used my machine on the wording - but you could just hand-cut it if you wanted).
For the hands: I just had my kids put their hands on the dull side of the vinyl (a pen won't write on that clear layer) and cut out along the line with scissors. Then ironed it on - be sure it iron it long enough, at least a minute. A minute is really long when you're just waiting, but don't jip it (I did and it didn't stick so I had to redo one). I did all the iron-on stuff before I pieced the pillow together. Love the hand prints!
If you are a real quilter, please don't laugh at my "piecing" attempt. I didn't know how to do the corners so I just made something up.
I wanted to do a ruffle around the edge, but it was a really long strip to gather and then the thread broke - so plan B - I made these pleat things - I don't even know if they have a name. While sewing on the trim, I just folded up a little and tucked it under as I went, as shown - if you're crazy you could measure each one or if you're crazier you could measure and pin it all before you start. I just guessed on mine - and they're uneven, I'm sure - and I'm okay with that. For the corner I folder a little triangle thing as shown:
After sewing on the trim, making sure it's facing the inside of your pillow, sew the back on - you can see how the trim in on the inside. That way when you turn it right-side-out, the trim shows.
And that's it! I think this will be great fun to get out each year and see how much the kids have grown. Maybe I should make a pillow each year and in 10 years I'll have a couch-worth of holiday pillows - but then I'd have to store all of those..... Anyways, go make yourself one. If you don't have vinyl heat transfer, you can buy some, or you can cut the hands out of fabric and applique them on the pillow.