Anyway, these moss balls involve sphagnum moss, which if you've never run into it, is NOT the same thing as sphagnum PEAT moss. Sphagnum moss is the green growing form of a moss that has natural antibiotic properties, is very absorbent, and tends to grow in damp forest areas. It grows wild around here, but a few years ago when I was looking for it to use in an air layer for some bonsai, I had a very hard time finding the dried stuff. Recently though I've seen it available at several places locally so I know its out there. Usually if I can find it here in the back of beyond, everyone else has had it for ages! You need to handle it with gloves and not breath the dust, there are some chances you'll get exposed to 'sporotrichosis' (a fungal disease, from what I'm reading) so its better to be cautious. Sphagnum PEAT moss on the other hand is old sphagnum moss that has been dead and decomposing in a bog for quite a long time. Its great for holding moisture in regular potting mix and things like that, but its broken down and not as good as the fresher stuff for this use.
The theory is, you take a plant, knock off the dirt, wrap the roots in damp sphagnum moss, then you can tie that ball together with string so you can handle it, but don't get too carried away. Next you need to chop some more of the sphagnum up or use regular potting mix or even peat moss, and mix it with just enough clay so the muck will hold together but still let water through to the roots. Make a ball of muck big enough that you can put your mossy root ball inside, then split it open and make a pocket to put the root ball in. Cover the root ball with the muck. This is the messiest part, in case you hadn't noticed!
Once your root ball is covered with the clay muck, you'll want a sheet of 'live moss' to wrap your kokedama in. This can be moss you collected or sheet moss that you've purchased, but you'll need enough to cover the whole thing. It should stick pretty well, but its a good idea to tie this sheet moss on with some string or twine. To make a hanging kokedama, you'll want to tie your string so that the plant balances where you want it which can be tricky. You can display the moss covered ball on a plate or a nice tray, or hang it!
The best choice for plants are going to do well in a mossy area, so something that can take filtered or low light and lots of moisture. I've also seen pictures of these planted with air-plants or succulents, and I suppose it all depends on if you are excited by the moss or just view it as a container.
ANYWAY, one of the projects I've come up with after looking at these things is an idea for small hanging planters that will give you an easy way to support the moss ball. I've built a bunch of little ones today, so we'll see how it goes!