For a perfect binding on any quilt, I've tried to put the steps in a photo format. This technique can be used for straight of the grain binding, or bias binding. After cutting your strips 2-1/2" wide and joining together with either a 45 degree angle seam, or straight seam (I preferred the angled to eliminate some of the bulk), be sure to have a strip that is about 18 inches longer than the circumference of your quilt edges. Press the seams open to avoid bulk.
Press the fabric strip in half, lengthwise, matching the raw edges.
Starting around the center area of the bottom edge of the quilt, and leaving a tail of about 9 inches, begin sewing the binding (through all layers of the quilt, and the two layers of the binding) with the raw edges matching the cut edge of the quilt. Use a generouse 1/4" seam allowance.
As you approach the first corner, stop stitching 1/4" away from the edge, as shown below:
Fold the binding strip back, aligning raw edge with next edge of quilt:
Holding in place, fold the strip back along the next edge, aligning the folded mitre with the previously sewn edge, and the raw edge along the new side (a pin can hold this in place, or simply use your fingers until sewn):
Begin sewing along this new edge, being sure to start your sewing 1/4" in from the folded mitre (this will allow for smooth turning later):
Continue the previous steps on all four corners. On the final edge, continue sewing until you reach approximately 8 or 9 inches from where you began. Stop stitching. Open up the binding strips and find the perfect joining position to make a smooth join. Pin the placement, and sew the binding strip ends together (remember, they are opened up, not folded) and stitch the seam. The seam should be the same method as your other joins (either 45 degree angle, or straight).
There is a lovely diagram of the joining step in Nancy Zieman's book Sewing with Nancy's Favorite Hints. I've done this method for years, and when I found this diagram, it was perfect. The book is a great one for all kinds of tips (sewing and quilting alike).
Now, trim the seam to 1/4 inch, and press open. Refold the binding strip and repress the edge. It should fit perfectly into the last unsewn edge of your quilt.
Complete the sewn edge. Voila! The binding is almost there! Now, turn the mitred corners so that they form a perfect crease.
Now for the handsewing (this is my favorite part)! Turn the binding to the back of the quilt and pin the folded edges just over the stitching line. Using an invisible stitch and matching thread, handsew the binding in place. If you wish, you can sew the mitred fold closed with tiny applique stitches. 
