Step 1: Plain old basecoat of Dark Blue (Vallejo)

Step 2: Half and half mix of Dark Blue and Space Wolf Grey. Paint on straight lines and feather it out with a damp brush. The feathering should leave one edge sharp, and drag the rest of the colour downward. I find it helps to position the brush so that the tip strokes along the bit you want to stay sharp, and the body of the brush helps pull the colour down. So the brush itself is at a right angle to the line :-). I've left the top line here unfeathered so the difference is visible.

Step 3: More Space Wolf Grey - so now the mix is about 2/3 of the mix from step 2, and 1/3 SWG. Basically repeat step 2, but focus on keeping the edge sharp, and feather the colour a shorter distance.

Step 4: Diluted pure white paint - go for a very fine line+feather along the edges - this is the last step so it's gotta look sharp. This next bit probably isn't technically correct or anything (heck, the whole thing's stylised), but it is necessary. Still with the thinned white paint, go back and line in the contours of the blade. The reason for this is that the line-pattern has a camo effect, so it breaks up the lines of the object... so because it's so little and looking fuzzy and indistinct is a bad thing in a mini, putting the lines back in is a good plan. I've also added little streaks along the blade edge and longer streaks along the body to give it a little depth, as the icy bits are supposed to be in the blade rather than on top of it.

It's not perfect, but it's a nifty effect and one of my favourites :-).

I've used it on a couple of other models, the guy on the bike, and the Runepriest.