Yeah you have to use Ferric Chloride, but I couldn't think of a reason to use anything else since FeCl works so quick and low fumes and you don't need to heat it.
danrogers- The Dalo pen is a special PCB pen with thick blue ink. Sharpies are good for touchup because they have a finer point than Dalo. Also a big wedge tip marker is good for covering blank areas quickly (which speeds etching and saves etchant).
Here's my "absolute beginner method" from whan i started in the mid '70s.
1. Punch the IC legs through paper. (This also works on printed PCB layouts from magazines)
2. sticky tape the paper on a scrubbed blank PCB
3. use a pointy thing to prick the holes for all the legs of the ICs
4. remove paper and draw IC pads with Dalo
5. draw tracks to join up the pads as desired
6. etch, drill holes (pinprick marks act as drill guides)
7 clean Dalo off with acetone or scrubbing
This is a perfectly acceptable system for simple projects like connecting an 8pin or 18pin PIC to a few LEDs, but like Hero999 said it won't look fantastic with the hand drawn tracks. The good side is speed, you can prick some holes and join them up in a couple of minutes, much faster than making a schematic in eagle and doing the PCB layup, then printing, laminating etc etc.