This is the skull after the first base layer of tissue is put on it.
It's a combination of the stretchy halloween spiderweb material and liquid latex. I've also used cotton balls and polyester batting. Each material has its own texture, and depending on what level of decay you want, they can give you interesting looks.

This is also completely unpainted, so it ends up having a very mummy-like quality. That's also because the first layer I put on was horizontal, mostly to define the eyelids. The idea is to generate a sort of "grain" in the way that muscles would fit around the face if they were decayed and dried up.

The eye is a cheap plastic dealie that I got in a bagful. It looks a lot better in the photo than it does in real life. I put one in because I wanted to see what it looked like-- I can't decide whether it is creepy or just silly.

Incidentally, to do a mummy, I'd use strips of cheesecloth in much the same way.

There is also a really neat and super-quick method using spray adhesive, plastic wrap, and a heat gun. Ends up looking like a dried-up unwrapped mummy.