Dawn, that's just one way to do it. Here's a version from Pretty Party Cakes by Peggy Porschen
I think most bakeries use Glace icing (Sugar Baby icing) or thin Royal Icing (harder but dries faster.)
To get a smooth icing for cupcakes, try Peggy's version.
To ice 30 cupcakes or 50 fondant fancies (like petit fours)
3.5 pounds ready-made fondant (Mar's Note: I buy Pettinice which comes in 5 lb slabs for $16 (way more $$ on Amazon.com))
2/3 C sugar syrup**
1 TBL lemon juice
1 TBL glucose
selection of food colors
Sugar Syrup:
Boil 1 1/4 C sugar with 1 C water, cool and add appropriate flavoring (seeds from vanilla bean//finely grated lemon zest + Limoncello // orange zest + Grand Marnier // peppermint liqueur)
Unless freshly made, place the fondant in a large microwave-proof bowl, cover with hot water and leave to soften for 15 minutes.
Pour away water and add remaining ingredients (except coloring).
Heat in the microwave for 3 minutes at 50% power. Sir well to combine and beat for 1 minute.
For dipping cupcakes and petit fours, divide the fondant between small bowls and color each bowl a different color, adding a drop at a time.
Before you start dipping, heat each bowl in the microwave for 10-20 seconds at full heat. You want the fondant warm, but not boiling.
Fondant should run smoothly. Add more sugar syrup if necessary.
For Cupcakes:
Soak top with sugar syrup
Brush top with strained apricot jam (thinned with a little hot water). LET DRY.
Have fondant ready and dip each cupcake.
http://i56.photobucket.com/albums/g166/Finer_Kitchens/scan0003.jpg
http://www.amazon.com/CK-Products-Pettinice-Rolled-Fondant/dp/B0025U8C62/ref=sr_1_3?ie=UTF8&s=home-garden&qid=1239552933&sr=8-3