The top picture here is the piece with the 1/4" seam allowance added.. on this fabric I used a "water erasable" marker and marked on the right side of the fabric. Once you have all of your pieces cut out.. including the basic quilt block that you will be appliqueing your design on (mine is a 12 1/2" square) I like to lay the pieces out on the background and make sure I like them. As you can see, even my quilt inspector (that's The Zoops) approves of it. It's much better to find out at this point that you don't like one of the fabrics than to wait until later. Happy with them? Great.. me too.
next I mark the block so I can place the pieces uniformly. in this case I just folded the background block and gently (with my fingers) put little creases in it to guide my placement. Now we're ready to progress with basting our seams.