here is a link to great info on sewing.about.com which explains this technique with images, http://sewing.about.com/od/techniques/ss/machineblindsti.htm
In brief, you need to fold the fabric to be hemmed into a Z shape with the wrong side hem edge at the bottom of the Z.
The Blind stitch is either three straight stitches then a wide zig zag which swings to the left and catches a little bit of the folded edge, or three small zig zags, then one wide zig zag to the left to catch one stitch into the folded edge. The zig zag style has a little more stretch in it so works good on jerseys and knits.
You need to use the blind hemming foot which helps you to line up the folded edge and keep it at a constant distance from the needle. It will look like this.
Turn the little silver screw to move the white plastic guide left or right until you've got just a smidgen of fabric being stitched by the left wide stitch. Always do a practice sample first to get the stitching and guide set right. On most machines you can vary the width of the big zig by adjusting the stitch width dial a little.
You need to adjust the blind hemming foot guide so that the needle is just catching a tiny amount of your folded fabric because this is the stitch which shows on the right side of the fabric when you unfold the Z. So forget trying to hem satin or expensive fabrics this way, a hand sewn stitch will give a much better finish.
Blind hemming works best on a hem which is continuously straight on the same grain line, its not great for a curved hem. So if you've got a tiered skirt or the frill on a bed valance, it is fine as the fabric edge to be hemmed will be a continuous straight length. You can use it on a slightly curved hem for jerseys as the fabric has more give, and patterns will help to disguise the stitching too.
I hope that this helps you to sew your blind hem, 4 thumbs up if so.