I have made these before. i bought a regular cheap store bought hat. I took it a part and made a template for the hat. I used card stock and then decorated it with either wrapping paper or scrapbooking paper. If you want to do the trim like the picture you posted, you need tissue paper fringe. here is a site to show you sample. (sure you can find it cheaper somewhere else. http://www.partycheap.com/Art_Tissue...599-master.htm
I have attached a picture of a custom hat i made. I used marabou trim on the bottom and then a detachable korker bow for the top. HTH.