I use a cutting mat, large plastic ruler, and rotary cutter to make my cuts exact. Several different companies make these, You can buy the pieces individually or as a set. The one I use is made by Fiscars, it came in the three piece set (it's cheaper if you buy the set). You could also cut them individually with scissors. Just be careful to make them as exact as possible. Cut 9 two inch squares.
Cut 5 three and a half inch squares (background fabric). Then cut across catty corner in both directions to make the setting triangles.
With right sides together, place a triangle on top of a square, lining up the corner and 2 sides as seen in the picture. Use 1/4 inch seams. Do one right after the other without cutting the thread in between, this is called flagging and it really does make the process go faster and it keeps you from loosing any pieces.
Lay out your flag on the ironing board with squares on top. Then with your iron set on cotton setting, use the nose of the iron to push the square up. Doing this ensures that the seam lays flat with no puckers or folds. Clip the thread in between, stack them and go back to the sewing machine.
With right sides together, place another triangle on top of the square on the opposite corner as seen in the picture to the left. Sew in the same manor as before.
Press, clip threads, and stack.
Orient your stack with the top triangle pointing up to the left and seams pointing down. Place one set on the machine, flip the next set over from right to left, place it on top of the first set with right sides together, lining up the sides, with the top triangle on top of the square and the top square on top of the triangle. Continue in this manor until all 9 are sewn together. Press seams. Cut 45 degree angles on both ends of the back strip of fabric, making sure that the angles you cut are complementary to the angles on the front piece you just made. Sew both sides. Your overall finished size if this band when laid flat should be 19 1/2 inches (which is the finished width of a standard pillow case.
For the case itself cut fabric 40 inches wide (add 3/4 inch if you are doing french seams) and 27 inches long, and a strip 40 inches by 5 inches (this will be the hem). Sew the bottom and side seam of the pillowcase and turn it right side out. With right sides together and the squares centered on the top of the pillowcase and the solid band on the back, use 1/4 inch seam to attach decorative band to case being careful to sew across the point of the squares, not into the squares.
Sew the ends of the 40 inch strip together making a band. With right sides together and lining up the side seam of the case with the seam of the band, sew hem band to the bottom edge of decorative band. Press seams down, turn up hem band 1/2 inch and press. Turn up hem to cover the seam between the case and the decorative band and blind stitch. There should be approximately one inch of fabric below the decorative band. The over all finished size of the pillow case should be 19 1/2" X 29".
These make excellent gifts any occation. People love them because that added personal touch makes it all that much more special and it really doesn't take that much time after you get the hang of it. I think it took about 1 1/2 to 2 hours for me to make each one and I was stoping to take pictures as I was doing it.