Brian,
The leather is stacked and glued to a dowel that goes through the middle of it. The dowel was also tenon fit into the walnut on both ends. When all glued up the blank looks like a 1.5 square with a dowel though the middle holding all of the parts together. Not sure on the glue that I used on this one, probably a wood glue like Elmer's Carpenter glue. After the blank is finished just drill and turn like any block of wood. The leather turns real nice. For the finish I probably used leather finish from Tandy.
Look a the pen I made, it is under "other things we turn" It has a leather upper on it. The biggest problem is that the core as in the dowel in the call and the leather has to be a tight fit. Punching holes in the leather and then gluing and stacking the leather on the dowel takes a lot of time.