The chemical way uses Armour Etch, you apply it with a small brush, the stuff is a bit globby and you need to make sure it's coated thoroughly. You leave it sit, they suggest for one to five minutes (one minute if you're using their glassware, five minutes for others), however I found that five minutes wasn't adequate enough and usually leave mine sit for 15-30, then you rinse it off. After it dries it looks like a very light sandblasting effect. I've attached photos of some of the items I put into our gift shop.
I just use regular sign vinyl for the stencil. I mask the design without weeding, and weed it once it's actually on the glass, as I had problems weeding smaller letters and such, it's also a bit easier to align in my opinion, since the surfaces are usually curved and transparent.
The gasket thing is a cool idea, dunno if I'd trust my cutter cutting cork and rubber though. I have an SP300, so I don't try to punish it, if I get an el-cheapo though, I'd probably give it a whirl!