I've played around with photoshop quite a bit and I tried to figure out the simplest way to make a stencil out of any picture.
So here it goes.
Take your picture, open it in photoshop.
Click the image tab at the top, and look for the mode tab (it's the first option in CS).
In the mode tab, set the image to grayscale.
It will probably ask if you want to discard color info, just click OK (but if you want to keep a copy of the picture in color, make sure that you do a "save as" and rename this file)
Next, open up the mode tab once again and look for the option that says "adjustments" (2nd option down on the list in CS)
Under adjustments, open the posterize option. It'll bring up a little window that allows you to put in a value anywhere from 2 to 255.
The numbers have to do with the amount of grays and such-- all you need to know is that 255 is what the picture looks like before you posterize it and 2 will give you black and white without any grays-- PERFECT FOR A STENCIL! So type in 2, click ok, and craft away
Keep in mind that the edges may be jagged- so after printing, get out a Sharpie and smooth the lines if you find that easier than simply cutting.
I have a picture but I can't figure out how to post it. Eh, if you want to see it, let me know.