I made up some of these paper dolls to add-on to packages this weekend. They could also be used as ornaments.
First I printed off pictures of the dolls. Then I cut out a piece of wrapping paper, 8 1/2 x 11 or so, for backing. Carefully cutting around each doll, leaving a stitching margin of a 1/2 inch approximately. I cut out a similar size of the wrapping paper for each doll and put them wrong sides together. I then stitched around the outside of each doll--leaving a small opening along a straightaway for stuffing. Carefully place a small amount of stuffing into the opening with a bamboo skewer and push into the doll, continue until the paper doll is slightly stuffed. You can then sew up the small opening and knot the loose threads at the back of the doll. I used a small grommet at the top of each doll and threaded a bit of red/white yarn for the hanger.
Alternatively, you could stitch around the doll leaving the bottom open, stuff and then stand them as decoration. It doesn't even need a bottom. I did this with pictures of Santa a few years ago.