You don't have to use the inlay technique. You could paint the back of the mirror and just let the paint show through the cut-out. If you choose to try the inlay check the archive of the blog for the earlier post for details.
This project requires that you make a bevel cut. The instruction with the pattern give the details. The bevel cut allows you to create a recess so you can install the mirror. 1/2 inch wood requires a 6.5 deg. bevel to allow the wood to recess 1/8 inch. You should make practice cut with your saw in scrap material to get the bevel where you want it. You should also test the fit of the mirror with practice material and adjust where you cut the bevel for a good fit.
The downloadable pattern includes the above designs plus a blank mirror. You could add someones initials to the blank for a great personalized gift.
The project requires a 4" round mirror. Woodcraft sells nice project mirrors at the following link. Use two-part epoxy to secure the mirror into the recess. http://www.woodcraft.com/family.aspx?familyid=1109
Another technique that I might try when I get time is epoxy inlay. Two-part epoxy can be colored and sanded. It might actually be an easier technique than the clay. If any of you try this let me know how it goes.
Have fun with this one and happy scrolling.