I've read your book where you make the jewelry box, and it features a oval walnut inlay with maple, and the walnut diamond in the middle. I have read that chapter over and over but for some reason its not soaking in. I understand I need to make templates to make templates, your inlay is actually more complex than what I need to do. I'm just inlaying the spalted "O" into the solid walnut lid. Any tips on template stock(thickness preferred) bits,guides, and or bushings would be great.I would try using 1/4 inch Baltic Birch or similar ply for your template. Making an "o" with an inside cut out is something I would try in two steps. First inlay the large "o" as a solid piece, no middle. Then inlay the spalted piece and sand it flush, then inlay a new piece of wood matching the outside wood in the middle of the "o". Use the guide bushing set for the router like I use in the box you mention from Simply Beautiful Boxes. It has a 1/8" bit a guide bushing and the additional brass collar. You can find these in Rockler or Woodcraft.
Send me photo when you get done. You will find my email address through my blogs: http://wisdomofhands.blogspot.com and http://boxmaking101.blogspot.com