Thank you for the nice comments everyone on the videos. There are still those watch video's that I've been meaning to upload and add to these.
Hi Jeff, The gold inlay pockets are cut away using the airdrill similar to the way I am cutting background out in these videos. After the pocket is made I undercut with a reshaped dental bur. It is like the smaller one I use in the videos but ground slightly smaller. I have described the process in the "cut a practice plate together" thread.
http://www.engravingforum.com/showthread.php?p=6877
Another way to undercut is how Raland Baptiste does it. We made a template for his undercut chisel.
http://www.engravingforum.com/showthread.php?t=2312
Of course a third way to undercut is with a graver. For staight line borders and such this is almost faster. For me it is tougher going around inside corners though. Make a knife edge shaped graver and place a tiny flat heel on for this. It basiclly makes a tiny flat. Here is a pic of that point...
http://www.handgravers.com/images/graver-flat.jpg
Still another way that can work for small inlay lines that are tough to get in to undercut is to use the same point in the above picture and jab in hooks at the bottom of the line. Be careful the hooks don't raise above the surface or you'll see white dots in the gold line after sanding flush.