You will find that there are many gadgets and tools to help you carve fruits and vegetables, including a very "cute" pumpkin carving kit marketed for Halloween every year. But I have found that most of your common garnishing and cutlery tools that you possess will do the job more than adequately...and if you have a bit of creativity and/or are artistic, even fewer are necessary.
I use a real nice paring knife from Chicago Cutlery with a wooden handle and a thin blade, both in thickness and width. I picked it up in Wal-Mart for about 4 or 5 dollars. My other "expensive" paring knives are too thick in width for carving smaller items. A wooden skewer is what I use to pick, pull, or poke pieces out while I am working. And last but not least, an X-Acto craft knife (the kind you buy or use for hobbies) for beginning a drawing or pattern that has detail that can be cut out later by the paring knife.
There are some really good books out there on carving and garnishing. However I must admit I learned by playing around in my spare time and haven't really bought or owned any of those books. Please consider though, if a book has templates for you that these are almost always irritating and confine you to trying to find the average/normal size watermelon.
Here are some basics for what I call "traditional" carving:
1. For some reason (that Harold McGee or Alton Brown could probably tell you), a watermelon sometimes has some pressure, so if you know of some areas that you can cut out go ahead and do so. You can leave the meat (fruit) but remove the rind. This keeps the watermelon from splitting or cracking while you're carving a design when starting with a whole watermelon (thus ruining it except for eating the remains).
2. As in step one, do your carving and remove the rind around it but leave the meat behind it until the absolute last minute. This keeps your work stable, keeps the watermelon in good physical shape, and leaves less of a chance that you will damage that section while working on something else. I have done carvings stretching them over several days only to hull the cavity out at the last minute -- everything was good and stable, the watermelon did not wilt, curl, and/or droop while waiting for presentation/completion.
3. Wrap the watermelon in plastic wrap/film in between working on it and/or storing (store in refrigerator). By using the above practice in step two, I have kept watermelons several days while carved and/or working on them. I have found that using lemon juice or any other fruit stabilizers doesn't prolong the life of the watermelon any more than the practices I currently use, so I don't brush carved areas with any kind of acidic juice to retard colorization. I have not had that problem with a watermelon.
4. I hardly ever use the meat inside a watermelon that I am carving (except for snacking on). It seems better to me to fill it with different color and texture contrasting fruits to eat and not to incorporate the watermelon meat itself back in (that's just my professional opinion). Backyard entertaining? Suuurrre, that would be fine!
5. Watermelon can be stood upright or lying down but if you are using it to hold flowers, be sure to remember to leave a good bit of the watermelon meat in the basket or vase style carving you have. It works well to hold everything in place; not to mention provide water/nourishment for the flowers if real.
6. I practice carving the "empty" space out first -- then detail or outline around it later. This keeps from a mass amount of mistake by misjudging the room that you will need to complete the design.
Actually explaining all the ways of carving a watermelon could get extremely extensive. Hopefully, these basics will help get you off to a good start while practicing your own graphics or designs. I also use my apple corer for cutting circles and for making heart or teardrop shapes with additional cuts. Using your zester (5 hole kind) works wonders for creating a basket look by alternating one inch zests horizontally and vertically. And if you have multiple size and shape metal or plastic cookie cutters you can press them firmly into the green of the watermelon creating a bruised/dark outline on the skin to use as a guide to cut whatever shape you used out of the rind.
Right now I know of 3 different types of watermelon carving styles which I have named myself because I am not sure if there is even a classification:
1. Traditional - this is what everyone is used to seeing whether it is simple or extravagant.
2. Whittle - I named this according to what it looks like, the green is whittled away to the white but not carving into the meat/flesh. This leaves a carved look -- like the surface of wood carvings.
3. Inverse - I am currently working on improving my technique in this area. Unlike Traditional, this relies on using the white rind (no green, or very little) and the flesh (red) as a supporting color and carved area giving more of a depth to the carving. As you could imagine, this one would not be hulled out or the flesh eaten at all.
While any one of these styles are great, I am seeing that more and more the styles are being combined for even more elaborate pieces. One book that I have recently run into is called Fantastic Food Decorating by Manuela Caldirola & Sergio Barzetti. It covers a section for melons and many other things but also comes with good tool and food science help for making your carvings successful.