Hi there. I use Photoshop Elements to do mine, but I know alot of people use a program called GIMP. I bought my template from Amy, a member of HG and it is awesome. She gives you instructions with her tutorial too. Let me go find her page for you...Be right back.
Here is the link to her etsy store. She has lots of tutorials available for many different programs. HTH! http://www.etsy.com/shop/MunchkinBabyDesigns