One of the first steps you will want to do is to take the top off of the pumpkin. I call this step decapitating the pumpkin.
I like to decaptitate the pumpkin using a reciprocating saw. I know it seems like overkill, but often the flesh around this area is quite thick, so the long blade of the recipro saw is really helpful. Besides, if you do this with a knife, you'll have a blocky looking cap. My caps generally have a nice smooth curve.
If you don't feel like dropping the big bucks for a reciprocating saw, try a drywall saw. This is the tool that your neighborhood electrician uses to put an outlet hole in drywall. It is a hand tool that looks like a steak knife with saw teeth. They are less than $10 at home centers and sometimes you can find an inexpensive model for less than $5.
When you are decapitating the pumpkin, tilt the blade so that the tip is in toward the center of the pumpkin and the hilt is toward the outside. This will make a cap that is conical and easy to remove.
If you want to save yourself some bother, put a small "juke" or little twitch in the curve. This will help you line up the plug later on. If you don't put some type of feature in the lid, you may have trouble figuring which way to line it up later.