I use all purpose white flour and water, with large strips of newspaper. Elmers and water is good to "professionalize" the creation by using it and strips of cloth after the original creation is finished (it gives it a skin-like look). I rented books about it and dabbled in it for a bit.
I start with rolled up balls of paper, styriphome sometimes inside and wire hangers cut into3- 5 inch peices for attaching body parts.
balloons make excellent tongues, have a hot glue gun handy because finishing touches are easier this way. Also i have notices that when making monsters rather than other things a mix of two paints sort of "swirled together" for the finish is neat, especially since their skin is wrinkly.