I'd like to suggest this article:
http://www.dspdimension.com/data/html/pshiftstft.html
It is wonderfully detailed, includes all the necessary C source
code to take the basic idea and make it fly. I used this
method to write my instrument tuner by ripping out the last phase
of the algorithm (resynthesis) and only using the exact
frequency peak info. Its pretty useful, and I learned a lot
from this article. Actually, I think thats the single most useful
DSP tutorial I've ever read. It made me really grok FFT, which
is something by its own right :-)
Oh, and it is pretty simple to make this stuff work with libfftw3, just
read tuneit.c (
http://delysid.org/tuneit.html).
Thanks for these excellent links, I think they will help me understand
this very well. And thanks to everyone else for their insights as well.