Open the base you intend on using. I'm using a base from Guinevere's Dolls. Create a new layer called "Sweater", and with the Brush tool set to size "1" and Opacity "100", draw the loose outline of the sweater. I used a medium grey for the outline, but you can use any color you please to experiment with.

Fill in the sweater with the Flood Fill tool and a somewhat lighter shade of grey. Clean up the messy lines until they are no more than 1 pixel thick at any point.

Get the Light/Dark tool, set the Opacity to about 83 and the size to "4", carefully right-click to shade the edges, folds, and below the bust of the sweater. This may take several attempts at perfecting, and you may adjust the Opacity to any level to see different results.

Now left-click to add bright areas to the larger areas of the sweater, such as the upper bust, the body (don't forget around the folds!), and the upper and lower arms. I had the Opacity set to 100 on the highlights, and it made them look too harsh. You may want to set the Opacity level somewhat lower.

Create a new layer called "Stripes". Click on any area outside the sweater with the Magic Wand tool, then go to Selections - Invert. Now go to the color pallette at the right side of your screen and choose a gradient. You can make your own, choose the ones PSP has to offer, or download some great ones from Xandorra. I'm using one of Xandorra's gradients, called Citrus. I set the Angle at 27 and the Repeats at 33, but you can change them to anything you desire. Making sure you're still on the "Stripes" layer, cover the sweater with the Flood Fill tool.

In your Layers toolbar that shows the name of each layer you've created thus far, there is a bar with an Opacity meter and a drop-down menu. The Opacity meter can easily be found because it has an eye beside it. Click on the arrow on the drop-down menu where it should say "Normal" and click on any one of the variations. I used "Multiply" for this tutorial.

To get rid of the dancing lines around your sweater, get the Magic Wand tool again and right-click anywhere around the sweater. Now go to Adjust - Add/Remove Noise - Add Noise and set Uniform noise to 7. Your doll's sweater should now look something like this:

Using your Smudge tool set to size "2" hardness of "50" and opacity of "34", very carefully blur the outlines and darker folds of the sweater. This makes it look much softer than it did if you left the hard outline.

Now all you have to do is add more clothes, some hair, and even some accessories, and you're done!