http://www.youtube.com/watch?v=_Ux7ewE4d9o
sometimes it's better to actually see it done than read about how to do it.
whatever tobacco they used is fairly brittle to start with. the flakes i "rub" end up being bent up, pliable pieces of tobacco, not rod straight bits and shards like in this video.
and here is one by dubinthedam, it's neary 10 minutes long, probably better (and different ways) than the first vid i linked.
http://www.youtube.com/watch?v=733OzTBYYwA