I have recently discovered paper embroidery. I had seen it a few times, but I hadn't been able to find too much about it either online or in the craft stores. Once I did an Amazon search, I found several books that look promising. I also found a great website that has lots of information on how to get started and also has some free patterns.
It's really alot of fun. This is what I worked on this weekend, and last night I made some Christmas ornament cards. I'll take photos and share those soon.
I discovered that you don't have to have a fancy punching tool or a mat. What I've been using is one of those thumb tacks with a little holder on the end (they come either in clear, silver, or different colors) and you can find them in any office supply store or school supply section at Walmart, etc. I think I may have bought mine at Staples. For the mat I'm using a mouse pad, and it's been working great so far. And I'm using one strand of DMC embroidery floss, except on the large circle above, I used two strands because it just looked better.
I bought some bookmark patterns and I can't wait to see how those turn out.