There are a number of drawstring bag tutorials on the net. This is one of the easiest methods and is for an unlined bag. You will need to finish the side and bottom seams with a zig-zag or overlock/serger stitch.
The shoe applique on the front of the bag is not part of this tutorial but you can find the template I used to create the shoes as a free download on my blog at http://winkdesigns.typepad.com/wink_designs/2009/01/tiny-dancer-ballet-slipper-charm-free-pattern-download.html
I varied the pattern this time around to make the shoes into Mary-Janes rather than ballet slippers by adding small straps of fabric across the middle and finishing them with buttons.
I use "Heat n' Bond Lite" to fuse the pieces in place before applique.