I traced graphics from The Graphics Fairy onto flour sack towels from Target.
I printed the reverse of the images onto embroidery stabilizer. The stabilizer has a sticky side so I stuck it onto the back side of a towel and then held it up to a light (either the window or a plastic box with a flashlight inside) and traced the lines with a Sharpie pen.
The more detail in the image, the more difficult it is. Also, if there are words, don't forget to reverse the image before you print it.