Gather your materials. Or do like I do and start working before it dawns on you that half the stuff you need you don't have. I used a $5 cotton duck drop cloth from Big Lots. I originally made the trip up there looking for the cool little storage things that karoda posted about but they didn't have any so I had to settle for the 3-section picture hanger/nails/nuts and bolts containers. They're pretty cool because you can screw them all together in a stack as high as you want and only use one top for it. And it has a cute little handle. But that has nothing to do with painting the floor cloth, so we'll move on.
I washed and dried the drop cloth on hot with no fabric softener and sort of threatened it with the iron when it came out of the dryer. It draws up some from the paint anyway so ironing it isn't imperative. Ironing has never been imperative to anything in my life up to this point. Mark the center if you're transferring a pattern to it or just lay it out and start painting if you have any actual artistic talent (which I don't) and feel like winging it. Tanya, have the offspring walk around on it with paint-y feet! Start transferring the pattern in whatever way you do it. Overhead projector (which I had until my daughter the virgin bumped it while it was on and blew the bulb) or those monster print-outs that have to be taped together.
If you use a pencil to mark on it, they don't show when you paint over it. If you use a Sharpie the lines show through the paint. I'm going back and outlining the whole thing in a black paint pen when I'm done so the lines were necessary, hence the Sharpies. Paint. Any color, any method, any design. It's up to you. It's not even necessary to get a thick coat on it....you'll see some of those little white spots showing through and unless you're anal and have more time/patience/budget than I do, just keep going. Do try to get even coverage if possible but you don't have to be perfect. If you have a tiny area to paint or a narrow point or something, it's easier to do a light coat in that area, let it dry and come back to it a few minutes later. Pick the dog and cat hair out as you go. Or leave it in, paint over it and call it a design element. You can also do a base white flash coat on the whole rug before painting but that takes gobs of paint and forever to dry. It also gets all over your floor underneath it.
Once you've done all the painting and have gone back with the Sharpie or paint pen for the details (don't forget to sign it!) THEN you have to iron. It's probably not necessary, but I do heat-set the acrylic paints before finishing it. Once that's all done, just put at least 2 coats on the front and one coat on the back back with the poly to seal it and make it mop-able. You can use any kind of paint you want as far as I know, as long as it doesn't run or bleed when you put the poly on it, it's good. I've used house paint, craft acrylics, markers, fingernail polish and enamels. Several thin coats of poly are better than one big blob of it smeared around, but you all knew that anyway.
I use the paper plates as palettes so I can throw them away. The spray baste is to stick the netting on the pattern, then I trace the pattern, remove the netting and stick it to the cloth. Then you trace it again, peel the netting off and VOILA! you have a transferred pattern without using that carbon paper stuff. If you look closely, I think you can see the netting stuck back over the pattern on the left.
I'm sure I'm forgetting something so feel free to ask questions.