I started making paper toys by modeling them in Google Sketchup and then using Pepakura to convert the model into a template. Sometimes I had to fix some things in Illustrator.

This worked for somethings but tended to give me shapes that might have looked nice but were deeply impractical to build. Plus, Pepakura, while very slick, is not smart about how easy or hard it is to construct something (so you have to spend time printing, building, and adjusting tab placement and folds and such).

My current approach is to use regular printer paper and make rough figures by folding and cutting and taping. If something is hard to do with this approach it tells me it will likely be hard to make into a template. Not everything that works with printer paper works as well on heavier paper, but it makes it easy to "doodle" and experiment in 3D.

When I have a shape I like I slice the tape and unfold the paper and trace it out to get the template, then scan it. I then fix it up in Illustrator, and print it on card stock and build it.

Certain shapes, such as as curves, are *really* tricky. My first paper toy had a curved head and while I like the shape it was hard to glue. I avoid these now. :) To get curves I use folding techniques so that the template is simpler and gluing is much easier. (For example, the shoes on Jim Panzee have curves that come from wrapping and folding, and the gluing is pretty basic.)

Prior to making my own toys I spent a lot of time building other people's work. You begin to get a feel for what works well and what is troublesome. But often you don't really know how well something works until you try it.