First thing is you need to make sure that your sewing machine is friends with the shirring technique, not all home machines play nice with thread elastic.
This is the brand I use, but just about any brand is fine as long as its thread elastic. Try it out on a swatch just so you don't mess up on your good fabric.
My machine is all threaded and just about ready to go. Here's what I did, I wound the thread elastic onto the bobbin and I have my regular poly-cotton thread threaded through the top of the machine. I'm lucky enough that I don't have to hand wind my elastic onto the bobbin but again some machines don't play nice and you might have to wind it by hand. Set you stitch length to the longest and your tension should be at 2 or 3.
With you fabric right side up start sewing the length of your fabric. I like to back stitch at the begining and the end of each row, but some say you don't need to.
Each row is about 1/4 " apart or the width of your machine foot. For the best results, remember to take your time, to make your rows even and make sure before you start your next row that you have enough elastic in your bobbin to finish off the row.
Once your elastics are secured (in this case the side seam) you need to steam with an iron or steamer the rows of elastics for maximum elasticity.
This is a rule of thumb: if you need, for lets say a bodice, 21 inches of shirred fabric make sure you have a piece 42 inches by the height of the bodice you desire. This is a guideline, not all fabrics will require double the amount for it to fit around the chest, it depends on the weight of the fabric and how rigid it is. Its always easier to cut it down to size then to have to try to add 2 or 3 inches to your fabric.
Next thing: elastic thread has latex in it. If you or your child has sensitive skin you may not want to make the bodice fit super tight because they won't want to weat it if its super itchy on their skin.
There you have the finished shirred bodice. Can you tell that JubeJube was in no mood for photos today. Next week I'll be posting a tutorial on how to make the one piece :)