Finally able to get back to you on niello:
A sulfur oxide mix is used and placed in the recesses of the silver work. It is a layer of material and heat is used. Some one mentioned engraving - although engraving is not part of the niello process, engraving, chasing, stampinng, and other techniques can be used to depress the silver thus making it possible for the niello chemicals to sink and hold. Only the raised surfaces are cleaned of material and show exposed silver.
Regarding kofgari:
GuyM - for some reason I was not catching on to what you were saying. 2 days ago it hit me and you are correct - Europe has been using in effect the same or similar technique, only they call it damascening. Basically the same process though - I have seen it on earlier 15th and 16th century Spanish earred daggers and even on Italian ornate hilts. I apologize for my brain not catching on sooner (tried a brain transplant once, and...well...um...couldn't find any donors
). Again, as I mentioned earlier, today I think it is only done in India.