When I saw it for the first time on Craftzine, I knew I had to make one. First step - make a bunch of cute birds from the Spool Sewing pattern.
Step two, go to the park and find some nice branches. We headed to Riverside Park in Manhattan and Jared proved to be an extra-good stick finder. I'm not sure what kind of tree they came from, but the bark peeled off easily to reveal a nice, smooth interior (a branch with bark would look good, too). You'll also need thread and screw eyes from the hardware store.
Next, sew the birds to the branches - I used yellow thread to look like feet. Sew through the underbelly of the bird and around the branch several times. In the end, my birds were still sliding around a little, so I secured them with a small amount of hot glue.
Screw in the eye hooks to the branches and hang each tier from thread - this took a lot of experimenting to get the balance right (mine's still a tad crooked). Start from the bottom and work your way up.
Lastly, act crazy-proud of your new bird mobile, which cost all of $2.50 and scrap fabric.
See some other great examples of these mobiles here, here and here.