Dear Juno,
Richard's explanation is good, and here are two other ways you can do it. Self ruffling needs to be cut twice the desired width of the ruffle, plus two seam allowances. I allow 2-1/2 to 3 times the circumference for ruffles; I like them full; however, as little as
1-1/2 times the circumference will work. Remember to fold a pleat in the juncture of the "V" to keep it pointed. Fold the length of the ruffle in half. If you want it soft, don't press it; if you want it more tailored, press the fold. Finish the short back ends, then gather to fit the neckline. Apply it with the raw edges next to the raw edges of the neck. When the facing is sewn and turned, the ruffle will be towards your face.
The second way is to use a contrast, either ribbon, as Richard did, or lace. Face the neck first, then apply the ruffle to the finished edge with zigzag set at its widest. Catch just the bare edge of the ruffle and neck edge with the left swing of the needle; the right swing should go all the way off the fabric. This looks like a whipped edge by hand when completed. Again, the ruffle will face towards your face when completed. And again, fold a pleat at the point of the "V" so it hangs correctly.
Teri