To sew yo yos together, pick up one yo yo and poke your needle (double-threaded and knotted) through the gathered center and angle the needle up so that it comes out at the edge. This enables you to hide the knot inside the yo yo. Place a second yo yo against the first one, back to back as shown in the photo.
Take several small whip stitches through the edges of both yo yos. How many stitches you need to take will depend on the overall size of the yo yo. For the 1 1/2 inch yo yo, I take 5-6 stitches over about 3/8 inch along the edges. Secure your thread with a few knots. If you are going to sew additional yo yos to your row, take your needle and thread through the inside of the yo to the other side to attach a new yo yo (be sure to keep the thread loose inside the yo yo). Repeat this step to make your rows and then stitch the rows together in the same fashion. You can use a neutral colored thread if you want the stitches to blend in, or use a contrasting thread to add a pop of color.
If the thought of cutting all those circles seems like too much trouble or you want to speed up the yo yo making process, the Clover Yo Yo Maker greatly simplifies the process. You just clip your fabric between the two pieces of plastic and stitch around using the stitching guide. In addition to round templates in assorted sizes, there are also templates for making other shapes of yo yos such as butterfly, shamrock, oval, flower and heart shapes.