There have been so many variations on the dream catcher, since almost every culture in the world had a tool that was similar in function.  The North American dream catcher is the most well known, as well as one of the most aesthetically pleasing to look at.  I have found that, although there are several different styles, some of the basic principles are the same.
    There are a million stores that sell beautiful dream catchers, and if you really feel a connection with one, it will work great.  But.... a dream catcher that you make yourself will almost always work even better.  In the stores, the commercial dream catchers are almost never made in a traditional fashion, or have any empowerment done on them.  Some stores do have special items made by individuals that are completely authentic, but these are usually far more expensive, and don't sell as well (because of the price).  Many times, you can actually feel the difference between commercial and authentic dream catchers just by gazing into them, even if they look almost identical.
     The way the dream catcher works: The dream catcher is a web, resembling a spiders web, only it has a hole in the center.  There are usually some beads, stones, feathers, trinkets woven into the web.  While you sleep, when a bad dream comes to haunt you, it gets confused by the web and gets caught in it.  The stones and trinkets on the web hold that bad dream there until morning, when the sun shines on it and burns them away.  The good dreams, being more pure and intuitive, easily navigate through the hole in the center, and enter into your dream time.  Different traditions have specific instructions on the placement, such as many prefer to always hang a dream catcher to the south of the sleeper; but I find this to be a personal preference.  I like mine to the West of me.

So.... How do ya build one of these things?

    Always make dream catchers at night.  While you weave them, allow the dreams flying through the air to be woven into the web.  This makes them more effective.  Concentrate  loosely on the dreams while you weave - maybe even daydream a bit while you make it.

Step 1.

    Find a hoop that you like.  Craft stores sell nice brass metal hoops that I like to use - they can take the stress of the strings pulling on them.  Some like to use branches - just remember that they have to be somewhat strong, as there is a lot of pressure on them.  Then wrap the entire hoop with either leather lace or some strip of cloth that you like.  Maybe color coordinate with your household.  Wrap it tight, so none of the actual hoop is showing under the wrap, unless you are using some pretty that you want to show through.  When the circle is complete, tie the ends together, possibly making a loop to hang it from.

Step 2.

    Find a string, or twine, or something to use for the webbing.  It should be at least 6 feet long, and made of a completely natural material, such as cotton or leather. Tie one end firmly to the hoop, and start from there.  Tightly pull it out roughly 20% along the hoop, and loop it around (over/under) in such a fashion that it won't slide.  Repeat this along the entire hoop, leaving some distance between the start and the end.  As far as the number of points (where the string connects to the hoop), some traditions use 13, representing the number of moons per year.  Use a number that has meaning to you, and try to use a number greater than eight.  The larger the number, the finer the string has to be, and the more complex the web will get.  Keep the string taunt, but nt to much, as it will tighten as you go inwards.

Step 3.

    Next, instead of looping the string to the hoop, connect (using the same looping techniques) it to the middle of each section of straight string.  Keep doing this, going around the entire loop until gets to small to continue.  That opening left will be the hole.  As you are weaving, remember to occasionally tread a bead or something into the string.  After you make a few, you can get creative with patterns and such.

Step 4.

    Now, when you reach the end, tie a knot to keep the string taunt.  It can be decorated by hang some feathers that have meaning to you from the bottom, and sometimes by ties bundles of herbs or twigs to the web itself.  The weaving and creation is now complete - but it is not finished yet!

Step 5.
    Empower it.  Hold it in your hands and gaze into it.  I like to have some relaxing music in the background and dim lights, or candle light.  Think of everything that you want it to for you, and everything that it means to you.  Look deeply into it, and see some of the beauty that you did not realize was even there while making it.  Notice how the center is not in the dead center of the circle (not usually anyway), and what that says about the piece.  Concentrate on the dreams that are woven into it, and what they are saying to you.  Close your eyes, and thank all the animals and plants, and possibly minerals they gave of themselves so that you could make this dream catcher.  Now, hang it where it looks right to you.
    Before you fall asleep next, gaze into the dream catcher from where you are laying, and thank it for guarding you in dream time.  Pleasant dreams :)