How do I...

[LSalesa]

yeah, illustrator tracing tool, that is the best option to get a proper outline. If you use the magic tool in photoshop sometimes you loose part of the outline and does not look professional...

[LSalesa]

ah! once you create the outline in Illustrator select it, go to top menu - Effect-Style-Round corners, choose 3 radius and you will get an smoother line.

[maritsaki]

Illustrator's pen tool is your best bet... you'll be really glad once you master it. Also you don't need to be great at drawing to use it just takes practice.
This way you'll have it as a graphic and you can scale it as much as you want as well. You could do it with the polygonal lasso in Photoshop but it'll be more work...

[snowy]

This is as good as I can with photoshop. Would anyone who has illustrator mind touching it up for me?

[Cwilk]

Yes, do it in Illustrator using the bezier tool. After you create the outline for the inside detail and the outside, you'll have to create a compound path to combine the elements so that when you place them over a pattern, it will show through the inside detail.