It's like hemming...
Turned applique is the most traditional approach to applique. It gives a clean seamed edge.
This lesson is originally from the Spirit Cloth Workshop and is now part of Spirit Cloth 101, my basic class. There are many videos online that you might find helpful as well. This is my basic method or stitching the folded edge.
Line Guided Method
Originally recorded in July 2010 as part of the Spirit Cloth Workshop
Also part of Spirit Cloth 101 Applique - part 1 which demonstrates some of the basic turned techniques I use in my work.
More Complex Shapes
January 11 2016: Applique figure Related post