My friend just made ruffled skirts for her GD's and she used the clear elastic that is about 1/4" wide. You just stretch it as you sew and it gathers the fabric.
I usually attach a long piece of yarn to the end of the fabric for the ruffle, and do a wide zigzag over the yarn, making sure not to catch the yarn in the stitch. Then when I pull the yarn and it ruffles.