I found the covers on Jim's Dollhouse Pages (Jim also has a ton of other things you can print out.) I printed them onto card stock, then glued them to pretty book-related scrapbook paper so the inside of the covers would look nice.
After the glue was dry, I cut them out with my X-acto knife.
To make the pages, I used an old dictionary I got at the local library. (People donate used books and the library sells them, $1 for hardbacks and 50 cents for paperbacks. I've gotten some amazing books that way! A few of them are too good to craft with, and I save them for photo props.)
I measured the covers and cut the book pages just a little smaller. Working in stacks of 10 sheets, I sewed them along the folded edge so the pages wouldn't fall out after gluing.
When I had enough of the page sections sewn to fit perfectly into the fold of the cover, I put a heavy line of glue in the cover and pressed the pages in place.
To keep everything from shifting while drying, I used a mini-clothespin. (The bobbin is there so you can see how small the book is!)