Step 2: Fold and press the wider seam allowance over the narrower one, so that it encases the raw edge of the narrow one.
Step 3: Fold and press the folded seam allowance over one more time so that the raw edge of the wider one is facing the fabric. The narrow one is now encased by the wider one, with the raw edge of the wider one facing the fabric near the original stitching line.
Step 4: Sew along the edge the seam allowance, about 3/8" from the original stitching line (for 5/8" seam). You now have a flat-felled seam!
Variation: To sew the flat felled seam so that the two stitch lines are on the outside of the fabric, as is common on jeans, sew your seam with wrong sides of the fabric together instead of right sides together.
Note: This version of the flat-felled seam is the most common one done by home sewers. It is often called the faux flat-felled seam because it varies from the version done on most ready-to-wear garments. You can find a great tutorial for the industrial flat-felled seam here.