I started out with a good old home depot drop sheet (blogger's linen). I pre washed and dried the covers in the washing machine and dryer. The spaces in the pergolas top pieces were measured and I used the measurement to cut the fabric in strips, adding on a seam allowance. For the size of the strips, we were guided by the pergola and the arrangement of the top wood pieces. For our pergola we fit 4 equal size pieces width wise. You want the length to be fairly taught when the panels are installed so that the fabric isn't dropping too much. If it's taught it won't have room to twist in the wind either, and should lay nice and flat and tight. I stitched up the hem all four of the sides on the sewing machine to create the fabric strips.
Then I added grommets to the four corners of each strip of fabric. The very helpful man at Home Depot said they wouldn't rust, since they're brass. I just followed the instructions on the package, and they turned out looking great.
Update: The Home Depot guys was completely right, 5 years later and the brass didn't rust one bit.
Next we wove the fabric strips through the top of the pergola, and tied them on the ends with small clean zip-ties. Lastly we added a few small staples for stability. When you're installing them weave one over and under in a pattern, and then weave the next under and over for a pretty effect.