I bought some sheets of Speedball Speedy-Cut at Blick. It's perfect for printing with water soluable mediums and carves like butter.
I did a sketch on tracing paper of my daughter wearing a goofy dog hat I made for her earlier this winter. I placed the pencil drawing, graphite side down, on the rubber surface. I rubbed the back of the drawing with a bone folder (a spoon would work) to transfer the lines. You don't want to draw directly on the surface since you could dent it and might not want the lines to show on your print.
The transferred print. It would have been helpful to stain the rubber with an ink pad so I could have seen the carved lines easier. Excess material can be cut off with a razor blade or X-Acto knife.
The carving was done with linoleum block carving tools. I used a fine gouge, a medium V and a wide gouge for removing larger sections. I carved until I thought it was almost done, inked the stamp, and made a print. This let me know where I needed to carve more. I didn't want to clean up all the lines since I like the rougher, wood block print look.
I had better results laying the stamp flat and pressing the ink pad down onto it rather than pressing the rubber block onto the ink pad. Speedy-Cut is 3/8 of an inch thick and is sturdy enough to not need a wood back. Remember, if you add text, the image has to be backwards or it will print backwards.
Don't undercut the raised areas since it will damage the integrity of the printing surface.