I haven't done pockets, but have read about them. I think this is one way.
Make the pocket lining separate and put it on hold. Work to where you want the pocket to be, knit one end of the pocket lining together with the stitches on your needle where you want the pocket to be. On the next row, work back to the part where the pocket is, but knit the other end of the pocket liner across and then finish the row. The pocket is now attached at two ends, and you'll have to sew up the sides later.
For the edge of the pocket, you can add some ribbing to the bottom edge or crochet a border, depending on how it looks.
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IngridKH on Ravelry