First let me say that I did not create this design, it is free clipart from a wonderful website called Aon Celtic Art.
First I traced the image onto black Canson Mi-Tieintes Pastel Paper (thanks to the recommendation of BiffyBeans). I then when over the traced image in pencil.
Then I began filling in the image with Caran D'Ache Neocolor II watercolor pastels. I first saw these lovely watercolor pastels on Journaling Arts blog, Cynthia's artwork inspired me to by a set.
Although I am not 100% satisfied with the result, it didn't turn out too bad.