Start out with these cheap, cheap, cheap wooden tree's from the craft store.
I had to pry the star off of mine because you need to have a flat surface for this project.
Paint the edges. You can be really sloppy (yeah!) because only the edge will show.
Grab some scrapbook papers. I chose reds and greens.
Trace the tree on the back of the paper and cut it out. Then simple Mod Podge it on to the tree (front and back). Poke a new hole and put some ribbon or string through it for hanging.