How I make mixes:
Cubic Carrot Software's Beat Counter to work out the BPM of each song.
Syntrillum's Cool Edit Pro to do the multi-track editing, time stretching and phase effects.
Lots of patience and time.
A good selection of music (>300 CDs) (note: this is not enough).
And, yes, Tony is right. In fact, if you email me your name and address I'll send you a CD with all the mixes I can fit on it. If you feel like it you can donate money to me via PayPal. (not sure how to include a link for it, though).
Have fun,
Paul