I've gotten many compliments on my little book necklace so a step by step tutorial follows.
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.
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.
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.
Glue the cloth piece to the spine, pressing down to make sure there is contact with all the signatures.
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
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.
Squeeze the jump ring closed with you fingers or pliers.
When the glue on the cloth on the book spine is dry, remove it from the vice grips and trim as shown below.
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.
Now glue the book spine and the excess cloth to the leather book cover, placing the spine over the jump ring.
To cover the cloth, glue marbelized paper on the first and last page extending to the leather cover.
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.
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.