I recently saw these "cross-stitch vintage cat and dogs wafer papers" on one of my favorite baking retail sites, Fancy Flours and was totally enchanted by the idea of edible retro embroidery!
Look at THESE! Homemade glazed doughnuts, with sprinkles as stitches, LOVE!
I can't get a close enough look at this cake to tell what was used for the stitching (or even if it's real?!). I am guessing this is either a printed edible wafer, or glaze with very small icing "stitches."
And this fantastic cake (can you imagine how long this took?) made by a blogger at Clockwork Lemon, she includes a step-by-step on her blog, here.
I'm thinking of trying it out using cupcakes, and liquid fondant as glaze -- what do you think, would it work?