Cut a piece of poly batting about 60x12". You can usually get this in bulk at a fabric store. Make sure it's soft and fluffy, not stiff, and about 1/2" thick.
If you are not making a cover for it, cut one piece of fashion fabric 14x20". Decorate it as you like.
If you are making a cover, cut three pieces 14x20" -- one plain for the outside of the muff form, one piece for the lining of the cover, and one piece for the outside of the cover. Decorate as you like.
You can make the outside of the form out of a fashion fabric if you don't intend to give it fluffy decorations. Same goes for the outside of the cover -- if it doesn't stand up high, you can make it reversible. This can give you up to three different looks for one muff and cover.
For the form, run a gather ing stitch down the 20" sides. Pull ONE SIDE down to 12", and sew it to the 12" end of the inside. Sew down the 11" and 14" sides all at once, making a tube that gets larger at one end. Before turning it right side out, wrap the batting around the inside of the muff, and pull the outer layer over it. At this point, all the seams should be on the inside. Now, pull the second gathered edge down to 12". Turn it under about half an inch, and do the same on the end of the inside piece. Match them up, pin, and sew around.
If you are only making the one layer, you're done. Before sewing up the final seam, you might consider putting on a loop of pretty ribbon or cord so you can carry it.
For the cover, sew the two pieces together along one of the 20" edges. Press it flat. Sew along the two 14" edges leaving about 1/2" open where all the seams meet, making a quite large tube. Press it flat, and turn it so that the lining is on the inside, and the fashion fabric is on the outside. All the seams should be on the outside now. Press the fold between the outer and the lining. Run a line of stitching about 1/2" from the folded edge, making a casing for a ribbon to gather it over the form. Turn under the remaining raw edges about 1/2", press, and pin together. sew them together either by hand or on a machine a scant 1/8" from the edge -- less if you can manage it. Leave it open about 1/2" where the seams meet, and run another line of stitching half an inch in from that edge. Now you have two channels on either end of a lined tube. Run ribbon or cord through them, put the cover on the form, and pull the ribbons tight enough to stay on but lose enough you can get your hands in. Now you have a muff.
Again, you might consider a hanging loop on the cover, on the opposite side from the opening for the ribbons. It isn't necessary, but it's really useful.