Here's one site with instructions for spray paint stenciling on T-shirts and another and one more. Maybe this one is the clearest. Read all the tips about washing the shirt, ventilation, etc.
Here is a general site about iron-on transfers.
See Culture of the Copy post below for project instructions. For extra credit, make 2 t-shirts: one to keep and one to trade with a classmate!
Bring your source image and ideas for it's alteration to class on Tuesday. Also read the last half of POL Chapter 5 for discussion.