A quick Google search for "tolex piping tutorial" actually turned up a post from this forum as the first result.
Back in 2005 Stephen said:
To install the string, cut a groove 1/8" wide by 1/8" deep on the top of the cabinet and the underside as well. The underside cut needs to be about 1.5" long from the edge. Chisel and saw out the roundover part of the cabinet to a depth of 1/8" as well.
Tolex the outside of the cab. Tolex over the gooves.
Before you wrap the tolex around the front / rear edges, slit the tolex with a sharp knife at 90 degrees from both edges of the cabinet and centered on the groove. Slit both front & rear.
Using those cuts as guidelines, lay a steel edge on the cabinet and carefully slit the tolex over the groove with a very sharp blade knife.
Force the tolex into the groove with a steel ruler.
Take the cabinet string, press it into the groove inside the cabinet, staple it in place inside the cabinet. Pull it taut and working from the stapled end, force it into the groove. Since it is a press fit, no glue is required. Use a light hammer to tap it into place where necessary. Wrap it around the opposite end and staple it in place.
That's pretty much how I do it, too. I cut the grooves on a table saw. It's best to cut the grooves before the cabinet is assembled. Just be really careful to slit the Tolex right down the middle of the groove!
Here's a link to the whole post. There's information on how to do piping around the edges of a baffle or front panel, too.
http://www.trinityamps.com/phpbb/viewtopic.php?t=402