I've gotten many compliments on my little book necklace so a step by step tutorial follows.
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Cut 25 small pieces of paper for the pages. I used paper pieces about 1 inch by 2 inches. Fold these into 5 page "signatures" and sew them together as shown below with regular needle and thread. Make a stitch that goes in and out of each group of pages, starting by going in the first signature, ending with going out the last signature and tie a square knot in the thread and snip it off.
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Take the sewn signatures and clamp them in a little vice. I made mine out of two small vice grips and 2 pieces of cardboard. Put glue along the spine of the book.
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Cut a little piece of cloth, longer than the book spine and make little ridges at the ends by gluing inside some heavy duty thread.
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Glue the cloth piece to the spine, pressing down to make sure there is contact with all the signatures.
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While the glue is drying, cut a piece of leather out of an old jacket or something that is somewhat bigger than the size of the pages that are used for the book
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Punch two little holes in the center of the leather piece to put a "jump ring" finding in. I bought these findings in the bead section of A. C. Moore.
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Squeeze the jump ring closed with you fingers or pliers.
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When the glue on the cloth on the book spine is dry, remove it from the vice grips and trim as shown below.
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Cut 2 pieces of marbelized paper the same size as your page size. You can make your own marbelized paper, or for a short cut, just print some out from the internet.
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Now glue the book spine and the excess cloth to the leather book cover, placing the spine over the jump ring.
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To cover the cloth, glue marbelized paper on the first and last page extending to the leather cover.
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Get ready to put this back in the vice grips and cardboard but slip some cellophane in between the folds of the marbelized paper so it won't glue to itself.
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When the glue is dry, take the book out, trim up the leather to match the page size, and run a ribbon through the jump ring. That's all there is to it. By the way, binding a real book isn't much different, except you need a bigger book press and the cover usually has cardboard in it.