Halfway through a cabinet restoration, using the current most prolific manufacturer of stencils and again it's the same old shit.
In order to line up the second color correctly over the first there needs to be some overlap anywhere those 2 colors meet, otherwise any slight mis-registration will allow the base color to be seen through the gap in those 2 colors. On some kits this might be acceptable to have no bleed if the two colors rarely interact with each other as some small amount of trimming to get it perfect is OK. But on the Bally Mystic I am currently doing there is so much interaction between the two colors that I might as well be cutting a new set fresh by hand than to use the stencils provided.
So if you make stencils please carefully look at the pattern, then provide at least 1/8" overlap where the colors meet (put the overlap on the bottom color, but then I guess it should be called underlap).
A lot of the time the stencils for the bottom color are the exact shape as what's seen when the image is done, but it's usually not needed. A blob of color will make the stencils easier to weed and alignment so much nicer when putting on the second color. CPR used to have a nice tutorial on how to do color separations on their website but I can't find the link anymore.
A perfect example of this is on the side of the playboy cabinet by the spring on the shooter rod
http://www.ipdb.org/showpic.pl?id=1823&picno=54727&zoom=1
Most stencils sets have the first purple layer arch around the shapes of the springs. This is not necessary. Simply run the purple in a straight line to make the shape of the plunger. The second color black can then be put directly over the top of the purple and there is no risk of the arches not lining up.