Capsicum, Its called a flat felled seam. There is another way of making flat felled seam in thru-hiker.com under the "workshop" in "basic seam for making your own gear". Nice pictures.
Funbun... I use an old White machine and can sew thru just about anything. The issue is not the fabric itself but going thru a folded seam with 4+ layers of fabric and two layers of webbing. I use 16 gauge needles, they are advertised as demin needles. Although you aleady mentioned it yourself, the backpacking.net site would be a great spot to ask about questions like this as well. Thru-hiker.com is another great site. Although its devoted to anything backpacking, he has got a lot of great info on seams and other things related to sewing.
Scott