Does it look like a familiar pattern? YES!
This is the pattern for the skirt: http://www.ravelry.com/patterns/library/115-41-skirt-in-fabel-knitted-from-side-to-side-with-shortened-rows
When the skirt is done, PU stitches at the waistband and knit up on circular needles until you get to the underarm. Divide into front and back onto two circulars, and work the front and back separately.
Ever 4 rows or so (depending on how you want the underarms and the gauge of your knitting) do a decrease on the ends for the sleeves. Do the same thing on the front and the back. Keep going until you get to the top of your shoulders.
Weave the front and back shoulders together. Do not weave the neck. The neck stitches will still be live.
For a tidy neckline, I like to single crochet the live stitches in a smaller needle size. I also single crochet around the armholes for a tidy look. Done and done.