Let me elaborate: in thin crevises such as between fingers, belts and straps, etc. I do use a thin application of paint (wash) but ONLY in those places, and NOT an overall wash like we would do with vehicles. And never pure black, but a very dark dilution of the base colors. Also slight shading on tops of fingers between knuckles, and highligting on the knuckles themselves. Undercutting is using just the tip of a very sharp knife blade, or an engraving tool. I use a dental pick:
http://www.micromark.com/5-piece-probe-set,6722.html The pointy tools from a set like this will do very well. Remove plastic not vertically (straight down), but at an angle under the item - straps, collars, etc. Doesn't need to cut deep - just enough to make a separation. Shading and pin wash will give it depth. You'll find more complete and in depth instructions in the "Painting" forum. Another point to undercutting: hollowing out sleeve cuffs - one way is to simply cut off the hand at the cuff, then drill and cut out the cuff and re-attach the hand with a piece of sprue or plastic tubing. I prefer to make a series of small holes with a pin vice and carve out the remaining connecting plastic with a pointy blade, leaving the hand attached. Then thin out the edge of the remaining cuff.