1) Acquire some iridescent cellophane.
So what's so great about this stuff? Well... it doesn't fray. You can cut intricate, detailed shapes out of it without any worry that those spiky bits on the edge are going to dissolve into their component threads. You can fuse it: after ordeal by heat gun, an iron isn't going to bother it. It's flexible. You can needlefelt fibers over it, which I often do to knock back the shine a little; you can machine-sew through it; you can hand embroider it with a big fat embroidery needle and it won't split. And that's just the fiber-arts virtues of it.
Tomorrow I'll post close-ups of the dragon at the top of this post and say more about the fiber-arts techniques involved.