Last year, I bought our family matching Christmas jammies. They were not cheap, and my husband's and mine quickly shrunk so much that they are almost unwearable. The boys' got rediculously faded after the first washing (supposedly because of the fire-retardant fabric, but they have plenty of other pajamas that don't do that). ANYWAY, I decided that was silly. This year, I'd make us our own. You only get to see the boys' though, because mine were quickly drenched in coffee by an excited little boy, and my husband's came out too small, despite simply tracing a pair he has.
I simply appliqued the letters on purchased tee shirts. I used steam-a-seam sheets to attach the appliques, and then machine-stitched around the edge.