After doing two different methods I think the best way to go about it is:
1) Prime your boards. It doesn't matter if you use OSB or plywood you will be able to see your lines better if you prime and it will also cover up the stamping on the wood.
2) Draw your outlines. Use a projector, tracing paper, or free hand. What ever skill you choose.
3) Darken your lines. It'll make it easier to cut.
4) Cut. You can use a jig saw, rotor saw, etc. Cutting will sometimes cause splinters on OSB so it is better to cut first and paint second. Otherwise you will have to re-touch your image.
5) Paint. Two coats may be needed for lighter colors but priming should have helped. Don't worry about making lines straight. You can fix it later when outlining.
6) Outling. You can use paint but I perfer a paint marker. I use the 'Tester' brand found at a craft store. I have also used those black mega sharpies with some success. The sharpies work better on painted portions than plain wood. Use a well vented room because of the fumes.
7) Finish. You can choose to finish your cutout by painting the edges or covering with a clear finish. I like to change my theme each year so I skip this step. The paint holds up just fine for the two months it is on display in FL but other states may very depending on rain/snow fall and sun.
8) Step back, have a beer and enjoy your hard work. Some may just want to skip to this step right away.
Have fun.
