there seem to be 2 ways...
You can use round posts that hold the ring(s) OR grooves that the rings can be set into. A white closed cell packing foam that will spring back after you make the groove, can be lined easier than wrapping a post. Here's a thread from back a while it doesn't show making the groove or lining it, that would be kinda self explanatory. No searches showed the "how to" that I could find.
http://www.woodworkingtalk.com/f27/tips-how-make-ring-bar-14569/
Another method is to use separate strips of foam that you press the lining material into:
Check in around 4:50 seconds
You can use round posts that hold the ring(s) OR grooves that the rings can be set into. A white closed cell packing foam that will spring back after you make the groove, can be lined easier than wrapping a post. Here's a thread from back a while it doesn't show making the groove or lining it, that would be kinda self explanatory. No searches showed the "how to" that I could find.
http://www.woodworkingtalk.com/f27/tips-how-make-ring-bar-14569/
Another method is to use separate strips of foam that you press the lining material into:
Check in around 4:50 seconds