This is my second recon... it went much better than my first one, but it was much simpler.
Here's how it started:
(This is actually the ebay seller's picture - I forgot to take one)
I cut off that strange frill bit at the bottom and hemmed it. I added a ruffly lace at the bottom (pre-made, I didn't make the ruffles myself, that would have gone horribly wrong!)
To make the bottom of the fabric heavier, so the dress wold be, er, swooshier (what? I'm a beginner!), I sewed some beads into the back of the bottom edge.
And here's the complete dress:
Using the fabric I cut off from the bottom, and some curtain rings to attach the handles (hah), I also made a bag. It's just lined with some white cotton and closes with velcro, and has a couple of little buttons at the base of each handle.
Here's a shot of the finished thing in action