Are you referring to a swirl? If you are, here is a link to the Wilton 1M tip swirl instructions.
http://www.wilton.com/technique/1M-Swirl
If I want a raised top, I'll pipe a big dot of frosting in the middle of the cupcake top, than I'll make my 1M or other swirl around that... the little lump of frosting in the middle gets hidden and creates an extra lift so it doesn't sink in if its still too warm. 
Yes, thats just fondant cut with a round cutter the size of your cupcake's top. You have to cut the top to make it flat first.
If your talking about something like the picture below (not mine) then I read that they just leaveled the top of the cupcakes first and then cut out the round fondant and applied it. Added a few dots and ribbion roses and they were done. I can't remember the site that I saved this from. HTH
Sherri
i think you can use rolled buttercream to achieve that, its bascially stiffen butter that can be rolled. here's a link for it http://www.cakecentral.com/cake_recipe-22-how-to-cover-your-cake.html
http://www.cakecentral.com/cake_recipe-7400-rolled-buttercream-icing.html
Hope this helps!!!!
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