At South by Southwest, I met the guys from InnerTee, a custom T-shirt-making company. Other custom apparel operations, like Cafe Press, GoodStorm, and Zazzle are great sites for creating schwag--apparel using your own logos and slogans. But on InnerTee, you can only select from the painfully hip artwork already on the site. Baseline apparel prices on InnerTee are decent, but you pay for each art element you want to include on your item.
For example, my masterpiece, Monster Whisperer, started with a $12 T-shirt. But the five design elements I added to it racked the price up to $22. At least on InnerTee there's no minimum order size, and the clothing is all screen-printed. The founders I met were all wearing their own products, and they looked great.
Designing you own shirt is easy, and a lot of fun, with the site's Flash-based design tool (much like on the other custom apparel sites). It's a drag that you can't change the size of the art elements, but you can rotate them.
Artists can submit artwork for inclusion in the InnerTee design catalog, and they get a cut each time someone includes their work in an order. Users don't get cash for mixing artwork on items, but they do get "karma points" for creating mixes and for participating in the InnerTee community. Karma points can be redeemed for discounts on future orders. Coming this weekend: a Digg-like voting system that will award the top designers extra karma points.