Steve, here's several of the ways that I do it. For very small valves with small stems I do all the machining in one setup. I first center drill for my hole making sure that when I get to depth I let the center drill dwell for a few seconds to clean up any runout it might have. Next I under size drill the hole then ream for the guide size. I then undersize drill for the port and finally I use a proper sized endmill or make up my own special diameter cutter from drill rod to clean up the drilled hole. This will leave you with a square edged hole. I don't use a cutter for the seat rather I take a very fine mounted stone (round shape) and put it into a small chuck and by hand just rotate it on the edge of the seat to break the sharp edge. I then mix up a slurry of oil and grit that I have rubbed off of some very fine emery paper and put a dab on the seating face of the valve. With the valve in place and held on the shank by a pin vise I rotate it back and forth lifting and rotating so that I don't sit in one spot. I only do this for just a few seconds then check the valve seat surface on the valve with a maginifying glass and look to see if I have a nice matt gray looking circle on the seat. This should be sufficient.
For larger valves I do all of the above with this exception. After cutting the port I then cut the seat with a purpose made cutter. I turn a piece of drill rod down to the diameter of the valve guide and long enough to go completely through the guide. I make this as close to size as possible (-.0003) On this piece of stock I then swing my compound over to 45 degrees and cut a chamfer. After doing this I put the piece of stock in my mill and cut at least 3 flutes, more if the valve head is bigger. When finished I harden this cutter and stone all the edges nice and sharp. I don't worry about tempering it as I only use it by hand so I have never broken one. I then put it into a chuck, oil the valve stem shaft, insert it into the valve guide hole and twist by hand until I get a nice small seat. The width will depend on the size of the valve but it doesn't need to be very wide. Finish up as above and you should be good to go. The biggest problem I have found is keeping the seat concentric with the guide hole. It seems like once it's been cut the least little bit off center any successive cutting will only follow what's already there. That's why I don't even cut very small seats.
gbritnell