Inlay

Just saw a great video on doing inlay on an Acoustic guitar.






Hmm.....

I updated this post on 1/30/2010 to provide some links to inlay suppliers:
www.luthiersupply.com

Here they provide a good intro to inlay here
As well as some info on making a tool:


Here is a link to some tools for sale such as the dental bur: here