Apparently in the magazine the instructions say to just put the live sleeve stitches on DPNs and knit a tube. (Note: I don't have the magazine, this is just what I remember from someone else.) I was concerned that this would cause too much extra fabric bunched up at the armpit, although I asked someone who did it this way, and she said she didn't notice any extra pit fabric.
When I knit long sleeves (actually ended up being more like 3/4-length sleeves, cause I ran out of yarn) on my ballet tee, I followed Option #2 from Grumperina's Long Sleeve Picovoli Tutorial
. It worked perfectly. Once I had all the stitches on my DPNs, I joined it in the round and just did decreases every few inches as I worked my way down.