Well I'm not sure how others do it, but I just basically picked out a red velvet fabric at JoAnn's that resembled blood. Then I just freehand an amoeba like pattern onto the fabric with marker, sewed it up along the freehand pattern, flipped inside out, stuffed it, and closed up the stuffing hole. It really only took me about 30 minutes a pillow, maybe less.
Then when someone lays on one with their eyes closed and someone snaps a shot from above, it looks like a blood pool under their head. Its really neat.