We start with a small patch of ground. 4x8 feet works well. It doesn't have to be cleared. We build a 4x8 frame of cedar fencing board.

It is simply fastened with screws at the corner. (In this picture, it's upside down.)

Next we start it with some kitchen scraps, to give the worms something to eat and help the composting process.

Next we lay down 2-3 layers of thick cardboard (available from any dumpster). Large appliance boxes are good. Don't leave any gaps, or the bermudagrass will find its way through.

Make it about a foot wider on each side than your frame, and wet it well.

Next, punch the frame through the cardboard and set it in the soil.

Level it and hammer it in.

Next, fill it with straw, not hay. Hay has seeds, although alfalfa hay is OK and high in nitrogen.
* One note from experience: if you do use alfalfa hay, it'll compost and get hot on its own once it's wet. So, set up the mulch, wet it, and let it burn until cool (as long as 2 weeks). Then put in your soil and plantings.

Be sure to break up the straw well, so it doesn't clump, and wet it well as you go. This photo shows the straw being watered. If you use alfalfa hay, you DON'T want to water it. In my experience, the alfalfa hay starts composting rapidly, heats up, and burns and wilts the plants you have planted in the mulch bed.

Here is the finished pile.

Now we make holes in the straw and puncture the cardboard with a knife, so the worms can make their way up through it.

Next we fill the little hole with soil.

Finally, we put our plant in the soil hole.

Here is our finished, planted bed! As the straw breaks down over time, we can continue to add more.

Here's a mature mulch bed over at Selwyn's house.