I included instructions on how to make a ruffle in the Cute Summer Shirt tutorial, but I didn't have any pictures. I found pictures from when I made a ruffle for a flower, and thought I'd share them! This tutorial is good for making ruffles of all sorts! You can coil it to make a flower, or add a cute trim to a shirt.
Mine needed to be 2 sided since both sides would be showing. Fold it so the edges overlap in the middle, and press your fabric with an iron to make nice seams.
Use a nice loose stitch, and sew it right up the middle! Remember not to back stitch for this part! Leave about an inch of thread when you snip it from you machine.
Grab one of the pieces of thread and pull it while pulling on the fabric. Do this on both sides until the entire piece of fabric is scrunched. Tie the ends of the fabric in a knot so they don't come lose.
I've also sewed plain 'ol ribbon to make ruffles to add to Emma's diapers. You could do the same thing to add ruffles to the butt of a onsie! The possibilities are endless.