How I created this weathered sign for Picas Taqueria:
Use spray paint to cover the box/board in a base color. Next, distress the surface with any materials at hand. In this case, I used a combination of sandpaper and dragging the box over a rough surface.
Print artwork, and use an exacto-blade to trim out any negative space, which will show through to the wood/background color. In this case, I tiled the artwork on four 13x19 inch sheets of Epson 3-star paper. When cutting out the letters, I left "bridges" between the outer edge and the floating "islands."
Also note the light grey areas on the printed artwork. This area will later be black, but because I intend to hand paint it, I only need a reference to follow.
Use wheat paste or Modge Podge (same difference really) to glue paper onto background surface. Notice that I removed the "bridges" at this stage as their only purpose was to assist in the registration of the letters during this step.
After the paper has thoroughly dried, use the same methods mentioned before to distress the paper.
Use water-based house paint (if artwork will be displayed outside) to add contrasting color. Because I had printed my paint guide directly onto the paper, this step was fairly straight-forward.
Distress the artwork one more time to remove some of the paint. The reason I split the distressing process into three passes rather than just once at the end was to achieve a very textural and layered feel. I wanted the sign to look like it had been around for years and possibly re-touched at some point.