We followed Daryl Taylor's instructions, which I'll let you read on your own.
The hovercraft is basically a large circle of plywood covered with plastic. A shop vac motor (one whose motor can be switched to blow) is attached to the craft. The motor pushes air into the space between the wood and the plastic, creating a buble. The plastic has several small holes in it - the air is forced out of those holes and in turn the craft is pushed up, hovering above the ground. Left alone, the hovercraft will stay in one place - add an outside force and you'll start to see physics laws in action!
Here are some pictures to aid in your construction (sorry, no action shots - go here to see Daryl's in action).
The bottom side:
In the center you'll place something to hold the plastic down. Most people would use a plastic lid, we used something my friend's husband had lying around in his workshop - I'm not even sure what it is!
In the above picture, you'll notice a small hole cut out, near the bottom of the picture, slightly to the left. That's where your shop-vac hose will connect to the hover craft, turning it from a heavy-piece-of-plywood-covered-with-duct-tape into a hovering-piece-of-plywood-covered-with-duct-tape!
It's not the most beautiful contraption ever, but it is a very cool demonstration of all kind of physics principles and it really does work!