I'm addicted to reverse applique, and that's pretty much the way I do it, too.
Here are a few other tips & tricks: I use iron-on, tear-away stabilizer to keep my 'reverse' fabric from moving. Oh, and I usually draw my design on with a water soluble marker so that I don't have to pin a template on.

But kat's applique's are way cooler than mine, so I should hush up now. ;)