That is also called chenille trapunto. You layer 4 or more layers. The backing, the batting, and two or more top fabrics. You quilt your design, and then cutaway a piece of the top fabric or fabrics to let the fabric below show through. I saw this demoed on a Linda Taylor vhs tape a few years ago and have always wanted to try it. She used several layers and let the cut edges fray giving it a very nice chenille effect.
You can see this on a preview of her tape at
http://www.thequiltingschool.com/vid...9-96784af98eb7 at about the 1:10 mark.