There is a video tutorial that should help you a great deal. Type in "free instructions, quilt binding" and click on the 5th website "Sewing Quilt Bindings: How to Quilt/eHow.com."
Very clear instructions. You can replay it until it "clicks."
I always cut my fabric 2 1/2" as I prefer using a 3/8" seam to sew on my binding. Just feel that it is more secure and allows for an occasional wobble.