Understitching is when you stitch a seam allowance down to a lining or interfacing of a project.  When understitching is done it causes the exterior fabric to roll just slightly to the inside of the garment or other project.  This prevents the lining from peaking out.  Unlike topstitching, you will not see understitching on the outside of your finished product.

Seam allowance pressed toward the yellow lining fabric

Once you have sewn a seam, grade and clip as needed before carefully pressing the seam allowance to the side of the lining or interfacing.

Understitching the seam allowance to the lining using an edge stitching foot

Use a machine straight stitch to sew the seam allowance to the lining.  This stitching should be about 1/8″ or slightly less from the original stitching line.  An edge stitching foot can be very helpful for this stitch.  I find that stitching from the right side of the lining fabric yields the most aesthetically pleasing results.  In most situations you will be able to feel that the seam allowance is to the correct side through the layers of fabric as you sew.

Front view of finished understitching

Back view of finished understitching