Here's how it's done:
To make one coaster you need:
Cardboard/posterboard/cardstock/or even plastic
mac-tac (the clear sticky paper/shelf liner stuff)
felt or craft foam
and whatever picture you want on the coaster. you could use something out of a magazine, or you could use photos. your favorite album covers, maybe? the possibilities are endless. I used postcards of the front covers of old pulp novels.
ok, so cut our a circle of card stock, a circle of felt, and a circle of your picture.
glue the carstock to the picture to stableize it, and make it stronger.
stick the picture, face down, to a piece of mac tac larger than your circle. http://i3.photobucket.com/albums/y72/mandyology/craftster/coastertut.jpg
cut slits in the mac tac, all the way around, then fold them over and stick them to the back of the picture.
(i did two layers of this to make absolutely sure that no moisture would get onto the picture and ruin it)
finally, all you need to do is glue your circle of felt on the back of the coaster.
now you can be stylish when you're being anal about not leaving watermarks on your coffee table.
(please note that the table in the photo was one that was being refinished, not one i was worried about protecting