How you go about doing it would depend on your software. With my 5D I can bring a picture in as a vector image and click a button that tells it to create a line of stitching with any stitch type around the outine and it will do it automatically. The eq7/eqstitch program requires that you draw the design using the same tools that you would for a quiltblock and then you tell it what stitch you would like to use to outline your designs.
If you go to
http://electricquilt.com/online-shop...sign-software/ and watch the cursor in the redwork and basics videos , you can see what steps are involved for it.
If you explain why you are asking (are you trying to work on one for your machine, what software do you have) you can get a more detailed answer.