Here's the before picture. Please excuse my pixelated face. My love for you guys only goes so far and it doesn't reach into Sunday-morning-haven't-showered-been-digging-through-piles-of-dirty-clothes territory. The most important thing I was looking for in the dress was a fit through the shoulders. As long as the shoulders fit, you can take it in anywhere else. On this dress, all I really want to do is take up the length to make it a mini. All you need is a measuring tape, scissors, tailor's chalk and a sewing machine (nothing fancy - I got mine at K-Mart).
The first thing you need to do is determine how long you want the skirt of the dress. I like mine to fall approximately 17 inches from my waist. That's a not-too-long/not-too-short length on me. I think mini dresses look best and are most practical when the skirt portion falls just below finger tip length when your arms are straight down by your sides. To determine how long your skirt needs to be, just hold a measuring tape up to your natural waist and let if hang down and measure where your finger tips end.
Now that you know how long the skirt needs to be, you have to determine how much to cut off the end. My skirt measures 27 inches in total length and I want my skirt to be 17 inches long so I need to make it 10 inches shorter. Wait! Before you start cutting you have to take into consideration how much of a hem you want. I like a hem of 1.5 inches so I subtract that from the 10 inches and figure out that I need to cut 8.5 inches off the bottom of the dress.
With the dress turned inside out, measure 8.5 inches up from the bottom hem, making marks with your chalk all the way around the dress. Don't skimp out and make marks only on one side - do it all the way around.
Following your chalk marks, cut the extra fabric from the bottom of the dress. Make sure you only cut through one layer of fabric at a time.
You can keep the scrap fabric for future sewing or crafting projects!
Next, with the dress still inside out, fold the hem of the dress up 1.5 inches and pin every couple of inches. 
Once all your pins are in place, run a straight stitch all the way around the bottom of the dress. If you like, you can adjust this step to turn the raw edge fabric under as you sew, creating a more finished look on the inside. I do this sometimes, depending on the fabric, but since this polyester isn't going to fray, I didn't worry about it.
Voila! New mini dress. Accessorize with some tights and your favorite belt and vest and no one will ever know your dress started its life as a baggy, ugly cast off.