We had a pumpkin carving contest at work, so I set out to make something totally creepy. I found the image of Rob Zombie online and used an enlarging projector to size it on the pumpkin. Then I used a red sharpie to trace the image. The projector method is 1000 times better than trying to tape a template to the pumpkin and punch guide holes through it.
I brought out a lot of tools to carve it with but in the end found the only thing I needed was a linoleum cutter. I used three blades: a large gouge, a meduim liner, and a fine liner. I blocked out the large areas with the gouge and then moved in with smaller blades for detail. I carved in about a quarter inch and did a test light. It wasn't nearly bright enough, but I could tell that it was going well and could be fixed. So I started hacking away, losing some detail in the process unfortunately, but it was still passable.
While you can see more details when the lights are on it's not nearly as impressive. The carving is reliant on the backlighting to produced the desired effect.