Step 2: This is optional.
You completely don't have to do this step, and if you don't have a fancy machine that embroiders you can certainly do it by hand. I just mainly wanted a cool embroidered focal point (and an excuse to play with my machine.
Each embroidery machine is certainly different, so you'll want to follow the directions for what you have.
1. Pick out your fabric for the center piece, and cut it so it's big enough for your embroidered design (my design is about 2") with plenty of space around it to actually trim a shape into it later.
2. Cut a piece of sticky stabilizer, big enough to fit in your hoop, and position your fabric in the center, then center it in the hoop itself.
3. Do your thing. Or really, let the machine do it's thing. Sit back and check your email or something.
4. Once it's finished remove it from the hoop, remove all of the stabilizer, and press.