I do them a bunch (or my guys do them now), but as Gabel mentioned there's definitely some time in them.

Around here, you see them a lot, with a square peg in a round hole (traditionally). A structural screw is the modern alternative, and is easy, cheap, and makes everyone happy. There's even a code-approved alternative to hurricane clips for stick rafters from Fastenmaster--a Timberlok up from the bottom side of the plate into the rafter.

As far as cutting them goes, it's a lot easier to describe in a demonstration, but...figure the lines for the step and the lap, either with math, or a framing square. Saw and chisel the lap part, trying not to undercut it. Stand on the inside of the plate, hold the chisel vertically (not straight up and down, just the opposite of horizontally), tilt it to the roof pitch by aligning the top edge of the chisel with the lap below. That scores the end grain of the step. Repeat on the other side of the step, chisel the waste out in the middle. Keep doing that and then start checking for square and depth with a combo square off of the lap. I don't know if that makes sense, but that's the quick description.