I punch the outer layer with this punch, on any color cardstock of your choice:
(This is not the same size as mine- I think mine is 1 3/4" to 2"- but is the same style and brand)
Then I cut a slightly smaller circle with a circle punch, and finally cut my picture out with an even smaller punch (both like this) :
My designs are created on Microsoft Word, by adding any clipart or word art to my page and outlining it with a circle the same size as my punch. Then you just turn the punch upside down (I'm not sure why they make it that way!) and punch it along the lines. You can glue the papers on top of each other or use scrapbooking tape. Then, the papers are glued onto a toothpick, sucker stick, or popsicle stick. All done and super easy!
For Josiah's party, I made 3 different Minnie themed toppers, 3 Mickey ones, and 2 generic ones.
Josiah LOVED his cupcake...
... to put it mildly...