Heat treating damascus all depends on what the steel is made of. Many of the decent ones you can buy commercially now (Thunderforge, etc) are a mix of 01, 1095(or 1080) and 15N20. The pattern is all the way through the steel, but you need to etch the blade in acid to bring out the pattern. The acid works on the different steels in different ways to give you the contrast in the pattern.
I'm just finishing up my first damascus blade. Took me forever to work up the nerve to start in on it (that stuff ain't cheap - but I am!) but it's gonna look sweet
This spring or summer I'll be going up to a (relatively) nearby bladesmith's shop and help him work up a damascus billet or two :D