This is the finished product of papering chipboard. Sorry I didn't get the shots of it while in process, I'll try to get those later.
In the process, I basically used Modge Podge to adhere the chipboard letters to the paper. After it dries, use precision scissors or an exacto knife to cut very close to the edges of the chipboard. Using a nail file type product, and other precision files, sand down the edges of the paper close to the chipboard. I used Colorbox brand ink in Walnut to touch up the edges because they were a weird whitish color after the sanding. I liked this aged look better.