Instructions
Chop down trees to obtain wooden logs. You need only one log to yield enough wooden planks to make a crafting table.
Press "I" and place the log in the 2-by-2 grid that appears. This causes four wooden planks to appear in a stack beside the grid. Drag the stack into an empty inventory slot. Do not close your inventory.
Fill the 2-by-2 grid with wooden planks. This causes a crafting table to appear beside the grid. Drag the table to one of your equipment slots, which is the row of nine squares on the bottom of the screen. Press "Esc" to close your inventory.
Right-click anywhere you want to place the crafting table.
Left-click on any sheep to obtain wool. Shave the sheep with shears to get up to four blocks of wool. Attacking the sheep otherwise will not yield wool unless you defeat the sheep, in which case, you will yield a single block.
Defeat spiders in the nighttime to obtain string. You can also find string in dungeon chests, but these are more difficult to find than spiders.
Right-click the crafting table to open a screen similar to your inventory, but instead with a 3-by-3 crafting grid.
Arrange the string in the grid so the string forms a 2-by-2 square. This causes a piece of wool to appear beside the grid. Drag the wool into your inventory to complete crafting.