If you want it to look very professional, it will be tricky. The mitered corners are hard to do neatly, and getting it to wrap around the rabbetted edge where the actual mirror fits could get fussy too, depending on how thick your fabric is.

I would skip the tufting shown in your photo. That's the kind of thing that a lot of DIYers attempt but hardly ever finesse. On the other hand, if you're ok with a DIY look, then go for it.

Are you planning to buy a ready-made framed mirror or are you going to make a frame yourself? The former will cut out a lot of steps and also the need for some tools that most people don't have laying around, like a router.

check out little green notebook blog - she uses peg board to make a button tufted headboard. Im sure that concept could work for this, provided you have to tools/materials to cut a hole in the middle (to make it a frame) and back it with some sort of board?...

Go for it. What's the worst that can happen? I've done all kinds of difficult things by just ... doing them. Google is your friend. Take it step by step, go slowly and be careful. Google when you are stuck.

I don't think mitering the corners will be that difficult. Fabric is very forgiving, you just fold it until it looks right and then staple.

The rabbetted edge will be a bit trickier, but I would staple and cut away as much as possible and then glue felt or something over the whole thing to protect the mirror.

Alternatively, don't use a rabbetted edge. Just cover a square with fabric and then add a molding strip around the back, just the size of the mirror, to serve as a rabbet.

If you are really worried and the fabric you are using is precious, experiment with muslin first.

My mom used to tell us,'You have two strong hands, two strong legs and a good mind. You can do it.'

It's no different than making a fabric covered picture frame. Why not make a couple, maybe out of the fabric you want to use so they will match?

Instead of diving in with the special embroidered fabric, practice with some cheaper fabric first. You can get a hang of technique and get your rookie mistakes out of the way.

First thing came to mind was to use a wood stretchers for a painting as your base. They come in plenty of sizes, aren't too expensive, good base to staple into. And while tufting is a pain, maybe you could use nailhead trim or individual nailheads to add interest. Hope that helps. :^)