This thread is really old but nobody has mentioned the way that i make patches so ill explain. Its very easy and you can get into great detail.
1. First a great website for getting patches is
http://stencilpunks.mattrunningnaked.com/
2. Get your self some Duck cloth, you can get it at most wal-marts and all craft stores.
3. Some blue painters tape the more expensive kind, dont worry you can steal all this shit really easy.
4. You need a exacto knife.
5.And some fabric paint.
1. All you have to do is, Print out, or draw a image you want to make into a patch.
2. Cut your fabric into the size that you want your patch.
3. Place your fabric on a hard surface.
4. Cover the fabric completely with the painters tape horizontally, over lap the tape just a little, and use enough tape that you tape it to your surface your using.
5. Run your hand over the tape a couple times, make sure the tape is good and stuck. (that's why you use the better tape cause the cheap stuff doesn't stick good)
6. Then place your image over the tape however you want it to look when its finally complete.
7. Tape down the size of the image.
8. Now cut out all the spots you want to fill with paint. For example.
If your making a white patch on black fabric then cut out all the spots that are you want to fill with white paint. ( dont press down to hard you just want it to go through the paper and tape.)
9. Once down take off the paper and you just have your tape with the cuts into it, peel off all the cut out pieces and you will see the fabric underneath.
10. Then just cover it with paint 1 or 2 times and then when dry peel back all the tape and BAM! you have a nice looking patch.
It does take a little while to get good at but once you get it down you can make patches in no time and there really easy.
If you want to look at some of the patches i have made here is the link to my myspace, under pictures i have a d.i.y. album with patches.
www.myspace.com/dsiegel
I hope this helps someone