I concur with the darts idea, or if you're lazy just tie the waist with a wide ribbon so its fitted.  My idea for the neckline is make it off the shoulder; it's hard to tell exactly what you already have to work with above the bust, but it seems large enough so that it could be cut and reshaped so it doesn't have those plain wide straps, AND if there's not enough material to redo it that way, why not choose a wide contrasting band of something bright or satiny and use that to make a band across the top of the bust and sides of the arms?

So I picked out a lightweight jersey to make some of those guacho pants that are everywhere that almost look like a flowy skirt.   Has anyone seen a commercial pattern to follow, or better yet, made up their own version from scratch?  They seem really simple, but I'm not sure of the best way to get the right fullness in the leg.  I'm going to try just a normal stretchpants top and then make gores for the legs.  Any other thoughts on the construction are welcome.  I'll be sure to post if it turns out.   

Venus also has a whole regular DIY and craft section, and they often interview designers and artists that do everything from knitting to photogrpahy. 

A little info, because I think it's important:

EZLN is the Ejercito Zapatista de Liberacion Nacional (For non-Spanish speakers, ejercito is army, the rest are cognates), and the guy on the shirt is probably the famous spokesperson Subcommander Marcos.  It's a revolutionary (sometimes violent) movement against the oppressive and corrupt elements of  Mexican government to get rights for the indigenous people of Mexico, especially in the state of Chiapas.  It started in the 90's and they're still active.   
Know your human rights movement history. 

And btw, cool dress. I also like how you did the straps 

Thanks so much, some of your suggestions helped a little.  I messed with the tension (upper only, I'm afraid to touch the bottom and since it ain't broke..).  I also got a ballpoint stretch needle, but I'm still having the same issue before that the zig zag which comes out fine on a stiffer fabric goes striaght or just slightly wobbly on a knit.  I suppose this is a problem of technique now...I go as slow as the machine allows and put very slight tension on the fabric to guide it through, but alas.  Any more suggestions? 

I just got myself my first sewing machine, a Brother VX710 from a thrift store for $15.  I was a hardcore hand sewer since the age of 10 but now that I'm in college I wanted something a little more efficient.  It works okay when I try to sew any woven fabric, but as soon as I switch to something thin or stretchy, especially knits, it goes all to pieces and bunches and the zig zag niether zigs nor zags.  The stitch length gets inconsistent or the thread will break.  Is this a problem with tension? I've also heard you need a special needle for stretch fabrics- do any of you use these? Is it just because this model is probably from the 70s and not capable of handling certain fabrics? Help if you can

I love the fabric and the whole design. It looks soft and fuzzy.  I've been meaning to make a v-neck hoodie- can you describe how you cut the hood pieces?  Seems like they should be two triangles with curved edges along the back of the neck. 

I saw an episode of What Not to Wear in which they made the girl's old Chucks into a book cover.  Not sure how they did it, but I bet you could find it  online somewhere. 

If you're into fake fur you could add some to the cuffs

I thought about felting, but since it's more silk than anything else, I don't think it will work.  At best it would do nothing, and at worst it could destory the fabric since silk is delicate.