Go here,
http://www.puppetbuilder.com/index2.html and learn how it's done. Everything you need to know, as far as what to use, is on this site. I like that you’re being creative and making your own puppets and not copying the muppets. Although I did make myself a "Mister Moose" to go with the "Bunny Rabbit" that I have owned since the fifties. Old, aint I?! I also bought a new "Bunny Rabbit" on Ebay so he looks as good as the moose.
I also own a Lambchop, Bert, Ernie, Grover, Kermit and of course Rowlf. I've made Homer from Home Depot and Jesus for a guy who does shows for kids at his church. Not to mention all the sock puppets I've made with my son. You really ought to try and get Cheryl Henson's book on making puppets you can learn a lot about eyes and noses and such. Have fun and try to clean up the mess you make so your mom (or wife) doesn't lose her cool.