Henry, It's actually pretty easy using a 90 deg. 1/2" dia. V- bit in the router...Woodwrangler did a great job of explaining it V-carving a Bulldog here on the foum, so I won't take away his explanation and pictures.
You can also see the technique on a Youtube video if you search "Vectric Vcarve inlay".
That is much easier than me trying to explain the whole thing here...good luck with it if you decide to try it.