Stay tuned for this knitting instructional video on the gusset stitch. When you knit the heel flap, you slipped a stitch at the beginning of each row. This made a very nice chain through which you can pick up the gusset stitches. You can either pick up stitches through the whole chain stitch, or through the back loop of the chain stitch. Picking up stitches through the whole chain stitch creates a rather definite seam on the inside which could be uncomfortable to wear. I prefer to pick up the gusset stitches through the back loop.
This is actually a "pick up and knit," because you are picking up loops of working yarn as you go. I like to pick up an extra stitch in the "corner" because it helps to avoid a hole in the area between the instep and the gusset.
After picking up the left side of the gusset, you work across the instep stitches, in pattern, and then pick up stitches on the right side, starting with that extra "corner" stitch.
Now knit half the number of heel stitches onto the end of needle #3. Slip the remaining heel stitches to the front of needle #1, and you are ready to continue with gusset decrease rounds, at the end of needle #1 and at the beginning of needle #3. Work these according to the knitting pattern directions.
Hope this knitting instructional video helps you improve your gusset stitch!