Steve's post reminded me that on two separate occasions recently, I was asked by fellow BHO members how I cut the slot for bindings. In 25 words or less, my go-tool is the number #116 Dremel bit. As you can see from the attached photo, it is somewhat conical in shape. When mounted in a Dremel router base, the effect of the conical shape of the cutter will be to undercut the fingerboard slightly thereby creating a uniform "shelf" parallel to the level of the fingerboard. I prefer this cut because the slope of the conical cutter begins the curvature of the neck at the top of the binding.
If you prefer the binding to be perpendicular to the face of the fingerboard rather than slightly sloped, then Dremel bit #115 would be my choice. I find that the #115 bit is very common whereas the #116 has to be special ordered.