I had actually never heard of it before signing up for this particular project so I had to do a lot of researching on the subject.
For those of you who were like me and completely clueless, it is basically a sheet of thin muslin (although I have heard of examples using organza and other sheers) brushed over with a glue and water mixture. To this you can add anything you like, strips of paper, small flat-ish objects (like dried flowers, seed pods, leaves, tea bags) etc, brush over another layer of the glue mixture and then lay a sheet of tissue paper over the top with another layer of the glue stuff to finish. You could then add colour to the wet glue or wait until it is dry to add extra colour. If you have used colour tissue paper or coloured objects then you may not want to add additional colour it at all.
I have only just started experimenting so my examples are quite rough, but I have found some more professional looking papers which I will show you afterwards.
When looking on Google, I particularly liked this fabric paper which has been made using tea leaves and some other bits and bobs. I think this is a really interesting idea because the colour of the tea will run slightly with the glue mixture and create interesting patterns by itself. I don't think that you put the entire tea bag into the paper, but you can tear it up a bit and remove the tea.
I think the below one is quite interesting, with free machine stitching over the top. This was found on Linda Matthews' blog, and she has some other interesting things to say about fabric paper you might want to take a peek at.