There are many ways to re-make t-shirts. One popular way is to cut the neckline into a square neckline, or boat neckline, and sew a fold over facing for it. In one really cute makeover I saw, the sleeves were cut on an angle, one inch at the underarm, and four inches at the shoulder top, which made a nice cap sleeve, and a square cut neckline, using strips from the sleeve as a facing for the neckline.
An easy way to make it more form fitting is to take two tucks in the back and front. Make them very small. I have also seen the sleeves removed and cut into strips to lace through holes punched up the two sides of the shirt. One of my favorites is make cuts 1/2 inch apart from the bottom of the shirt, going up at least four inches or more. Slip one or more large beads on each strip and knot at the bottom.
There are many inexpensive books at the fabric shops and available online with great tips.
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