As Horse Doctor points out there is enough information in
"The Art of Building thePennsylvania Longrifle" pp129-130 to get you going.
Yes, the wire can eventually work it's way back out of the cut it lives in. A little about this later.
You will have no use for a regular chisel as all of the cuts are done by driving homemade pieces of hacksaw blades in perpendicular to the surface of the wood.
To make these tools, cut off a 2 inch long piece of hacksaw blade. I use a high speed hand held grinder to do this but any method that gets you a 2 inch long piece is good enough.
What you want to end up with is a little tab which is about 1/8 wide and 1/8 long and centralized with the sides of the blades. You will also find having one about 1/16 wide X 1/8 long is handy for turning corners.
Some people also anneal the hacksaw blade and form it into concave shapes. Although I have made these curved types, the curve never seems to fit the pattern I want to use it on so I prefer the 1/16 wide blades for these areas.
File or hone the end of this tab so it is chisel shaped and sharp.
The "wire" as H.D. said is actually ribbon which is available in brass or German Silver (copper nickle) or Sterling Silver. It is usually sold in 3 foot lengths in three thicknesses: .008 and .014 for the brass/German Silver and .010 for the Sterling. The ribbon is about .055 wide. It is also quite inexpensive.
IMO the thinner ribbon is easier to install in the cuts you will make because when you pull the hacksaw chisel out, the wood likes to close up a little. This makes installing the thicker ribbon a little harder to do.
For your first projects I would suggest keeping it simple without crossings and with gentle radii rather than tight little corners. Note, I didn't say not to have multiple wires next to one another but keep them at least 1/16 apart to prevent the wood from splitting into the adjacent groove.
When you've finished a few wire inlays, go ahead and live dangerously with crossing patterns and little curly cues but for starters it's best to keep it simple. You also don't have to work only on the flat areas. The ribbon can be bent to follow the concave/convex surface of the wood but this makes it a little more challanging.
It is best to plan on refinishing the stock where you've installed the ribbon because you are either going to file it down flush with the wood, or sand the wood flush with the ribbon to get the "one piece" look your after. You will also have to be able to get the wood really wet to lock the ribbon in place so having the wood bare helps this.
One "trick" to do to the wire to help it stay installed is to form little grooves in its sides before you install it.
To do this, get a real fine toothed file and with the ribbon on a board, run the edge of the file along the ribbons length. What you want is little grooves the length of the ribbon. If you screw up and they aren't nice evenly spaced grooves, who's to know? Their purpose is to help the sides of the ribbon grab the end fibers of the wood to lock it in better.
I also recommend using white/yellow woodworkers glue in the groove before tapping the ribbon in. It seems to help a lot to prevent the inlay from coming loose later in the guns life.
Lay out your pattern on the wood. Before you start punching it in, go away and come back and look again. I often change the pattern 5 to 10 times before it always looks "right" to me.
Get your good glasses on and a little hammer. Place the punch/chisel on the line and drive it into the wood over 1/16 but less than 1/8 inch deep.
Move the chisel along the line overlaping the previous cut until you have the entire line cut. Beware of non overlapping cuts. They will cause nothing but grief. The ribbon cannot cut the wood when you try to push it into place.
To install the ribbon rub some white/yellow glue into about a 2-3 inch length of the groove starting at one end of the cut, and insert the ribbon using your fingers to bend it to follow the pattern. If it doesn't want to go in, a small block of wood to push with helps a lot. Resist the desire to just pound it in with a hammer although some light tapping sometimes helps. When you've finished with the 2-3 inch glued area, glue the next 2-3 inches and so on until you reach the far end of the cut. The reason for this is 1. The glue drys relatively quickly, 2. The glue will cause the grooves to start to swell shut before the ribbon is installed.
When you get to the end of the line, cut the ribbon off with some good dykes or sheet metal cutters and push/tap it flush with the stock.
When all of the patterns are "rough" installed, throughly wet the wood around the ribbons. This will cause the wood to swell back the way God intended it to be (before you messed with it) and when it drys, it will tightly grip the sides of the ribbon.
When it is thoughly dry, using your fine tooth file and carefully file the wood and metal flush and proceed to refinish the wood in any manner you wish.
Happy Building!