Here is a nice link to a tutorial to follow by ReginaE of Ehow with directions on how to convert a jpeg image into an embroidery pattern. Note: transfer paper is on the supply list.
I used my version of Photoshop Elements to convert one of the cupcakes from last week's pattern into a transfer image.
This image can be printed on iron on transfer paper for light colors and used as a template. I'm going to try it and will post pictures of how it's going! Will also try it with plain ole tracing paper, too.