Stockinette stitch is like most plain sweaters looks - Vs or knit sts on one side, bumps or purl sts on the other side. When you knit in the round you knit every round; when you knit flat, you knit a row, purl a row. A gusset is a piece of knitting that `expands' an area, it starts at the base of the thumb to make more sts for it (look at your hand). See in the row where you knit 12, place a marker, make/inc a st, k1, make a st, place marker, k12. You will be increasing sts between those markers to form the thumb. Later, you'll put those sts on a holder whie you finish the mittens, then go back and use those to make the thumb.
sue- knitting heretic