Use a real thin plasticard. Something like the .010 sheet from Evergreen. Cut it to the basic shape you want. Take a section of 1/16" plastic rod and use that to make whatever bannerpole your going to have. Glue banner to pole with model plane cement (testors orange tube). Allow to dry and cure.
Now the fun part: using a candle or other CONTROLLED flame very gently run the banner across the flame. The heat will cause the banner to warp and crease making it look like its waving in the breeze. For a hanging banner I would make the waves very gentle since gravity will tend to pull it strait. Once your happy with the look Primer and Paint (their will probably be blackened marks on the plastic...the primer and paint will cover that just fine. For a hanging banner attach a length of jewlers chain to the banner pole ends and the other to whatever mounting point your using. You can also use some thread so it looks like rope is holding the banner.