ID/whatever card - Get out your old Joe Schmoe, INC. identification card, library card, or whatever it is you feel you need to have an upgraded duplicate of.
Photoshop - or any other equivalent software - however, I'm gonna be using photoshop so it will be easier to follow along if you are using it as well.
Scanner - Good quality if possible
Printer - Also good quality
Laminator - more detail on which type when I get to it
Teslin paper - available from several websites. I recommend as it is the only site I could find selling the 4 x 6 perforated sheets I use here. They run from $4 US for a single ID to $33 for a pack of 20. IMO, go for the big pack because in all likelihood you will screw up a couple of times in the process of making this. Make sure you get the kind for your printer, whether inkjet or laser. Artisyn paper supposedly is just is good or better, but I've never tried it.
Butterfly laminate pouches - Again, many websites to choose from. If you buy from PoisonID, they come with the teslin paper. However, if you want your card to be magnetic stripe-scannable, then you will need to buy from a site selling 10 mil pouches (PoisonID's are 7 mil - close, but probably won't work with a magnetic strip encoder). They will also need a magnetic strip on the back - try here
Scalpel or scissors or both
Hologram overlays - available from PoisonID as well as many other sites. Gives it some extra pizazz. However they are stick-on so they're a royal pain in the ass to apply without mucking up.
Magnetic stripe encoder - Pretty expensive normally. I would look for one on ebay to try and score it for under $150. Good luck.
Curling iron/regular iron/hair straightener - if the ID you are trying to copy has a hologram on it, use one of these to get rid of it.