Artist Ray Villafane carves incredible pumpkins and has posted a HOWTO on sculpting your own.
From his site:
If you have yet to try and carve a pumpkin in a 3-D manner you need to. Its fun and everybody enjoys a cool pumpkin. Unfortunately they begin to rot less than a week after carving so be sure to take plenty of pictures. You can experiment with ways of preserving them but I find nothing works better than a nice photo. Some chefs that I have carved for put lemon juice on the faces to help slow down the natural molding process that will occur.
Picking out the right pumpkin is very important. You need a pumpkin with a thick wall. To get this kind you will have to choose one that is very heavy for its size. Also avoid perfectly round pumpkins and opt for ones that have a protruding ridge that sticks out on one side. These shapes make nice faces as you could imagine how difficult it would be to carve a 3-D face onto a shallow flat surface.