After knitting the leg and heel part of the sock, I make sure that I finish
with a row on the right side.

I have labeled the 2 circular needles here as "top of sock needle" and "heel needle".
This is a view of the inside of the sock, and a side view. Both have the
heel stitches on top, and the top or foot stitches needle is on the bottom.
the heel stitches needle is the needle we pick up all of our stitches with.
         

I start to pick up the stitches to the left of the heel, with the right side
(outside) of the sock facing me. This is actually the inside of the sock,
so- as you are picking up the stitches, you would be seeing the other side.

I always pick up extra stitches at the beginning and end, to avoid getting holes.
When i get to the top of the sock stitches needle, I drop the needle with the
heel stitches, and continue my round on the "top of the sock" circular needle.

After knitting the "top of the sock" stitches, I drop that circular,
and go back to working with the heel stitches needle.
Start picking up stitches on the other side of the heel portion- try to pick up
approximately the same amount of stitches. A difference of 1 or 2 is ok.
The left photo is the outside view of your sock, the one on the right, the inside.
         

Now you are ready to work 2 or 3 rounds on all of the stitches, and begin your
gusset decreases after that. Don't forget to follow any pattern you are knitting.

Here you see how the needle with all of the side and heel stitches is much fuller
than the needle for the top. In this case, I have 50 stitches on one, and 32 on the other.
The gusset decreases will eliminate all of the extras.

To decrease for the gusset, slip-slip-knit the first two stitches of the heel needle,
knit across to within two stitches of the other end and knit those two stitches together.
Knit one round (both circulars) even without decreases. Repeat those two rounds
until you arrive at the number of stitches needed.

The photo also shows how nice it looks with the extra picked up stitches.
NO HOLES! (except for the ones in the pattern! LOL)

I hope this makes sense to you!
If you have any questions, please e- mail me

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