I'm using Photoshop Elements...I haven't mastered it yet (as yo ucan tell by my siggie) but I"m getting better.
Most of it is picking the background you like and then being able to use the eraser and then magic wand to cut the image from the picture you're using...
There are some good tutorials on youtube on how to make really spiffy ones!
I use Gimp for mine. I find it much easier to use then photoshop. I would voulenteer to make some for other members because I have nothing better to do at the moment, but the airport in Athens only allows me 45 mins of free internet :/