When Daniel and I made the guitar, we used the Festool MFS adjustable rectangle router template (if you're price conscious, here's how I built a similar jig for cheap) to build the jig to do the inlays in the fretboard: First as a slot with rounded ends into whcih we put a glued-up strip we'd made on the router table, second as little squares with rounded corners that we cut clean with a chisel.
But at some point I was hanging around Alembic and they had an amazing instrument on the wall that had the planets inlaid in to the fret board. It may have been Planet of the Bass. This was inspiring because unlike some of their inlays I could actually imagine myself doing this, but there were a few things there that weren't simple circles or rectangles. Unlike some of their more dramatic inlays.
So last time I was at a Sonoma County Woodworker Association meeting, I got into a conversation about inlays, and heard "oh, yeah, you just lay put your piece on the board, scribe around it, and use a small router"...
Well, that sounded easy. On Saturday, Charlene and I were bouncing around and hit a bead shop. There was a $.75 brass butterfly there, I thought that was worth six bits to try out, so I brought it home, dropped it on a piece of Walnut, scribed around it with a wallboard(!) knife (should have used an X-Acto), tossed a 3/32" bit in the OF 1010, and...
Well, that's not perfect, but it's kinda cool. Meanwhile, Charlene was playing with her technique on the bandsaw, trying to slice pieces off of some wormy Redwood we'd picked up off of a road widening project nearby. So I looked at her, and she looked at me, and I looked at her slices, and she looked at my inlay practice, and she grabbed a scrap of Koa, and after a few minutes between the router with the 3/32" bit to cut the outline and a little work on the milling machine to hog out the inside, she grabbed the linseed oil and we had a trivet/hotpad like thingy:
Clearly there's a lot left to learn here, but I think the major take-aways are: Use a small bit, don't try to cut more than 1/8" or so into the host material (the Redwood/Koa inlay was 1/4", and that was harder to control), cut deep enough in your scribe around the outside that you can clean up with a knife or chisel, and be prepared to do a little cyanoacrylate/sawdust filling, but for some projects this is a doable thing...
Now to hit a rock shop, I think there are some geode and turquoise slices that could end up embedded...