Oriental Trading has book totes in several sizes. I used acrylic paint (you can find it at Wal-Mart for 97 cents to two or three dollars in many colors) and adhesive buttons also from Oriental Trading. You can also dress up your tote with stickers!
I attempted to make it as nice as the example on Spoonful, but alas, it was not to be. When the paint was dry, I wrote the names of some of my favorite books on the spines with permanent marker. I brought in my blow dryer to speed up the drying process, but also had bags where the kids could put their totes in if they weren't completely dry by the end of the program.
Here are some other great book tote ideas:
Bookish Book Totes for Kids @ BookRiot
Personalized Library Tote @ Ink and Squid
Library Tote Bags @ Occasionally Crafty