It took me about a week to unlock the mystery of transferring images to fabric - old fashioned carbon paper. Helpful hint: look for a dusty, local stationery store for the best prices on this stuff. Staples is dreadfully overpriced, and I haven't had consistent luck at craft stores with this particular supply. You can reuse the sheets, so a little goes a long way. (Update on this: try dressmaker's transfer paper instead. It washes out.)
Another great way to learn is to pick up one of Sublime Stitching's kits. It contains everything you need to start, including transfer paper, a nice wood hoop (I have tried plastic and find it un-yummy to work with). I prefer the kind of embroidery thread that comes in a ball, but again, this is a great way to dip your toe in the water.
The chicken and I attacked this first project together. It was a combination of xeroxing and recreating images from scratch. I must say the chicken did an excellent job on the squirrel - he really made it his own.
After I had finally traced the images on fabric and finished embroidering the first creature, i had the first "aha" moment.
Aha! I can actually do this.
Aha! I like doing this.
Aha! There's no way this pillow is going to save me money.
I have seen the future. And it's going to be expensive.