This is from an old Orpheum banjo. The inlay was broken before it was installed, the maker didn't even line up the broken pieces very well, and there is a lot of filler around the inlay cavity. This was, in its day, a fairly pricey instrument.
Don't feel bad if your inlays are less than perfect.
This manufacturer decided he could put a square peg in a round hole. This was pretty visible, even to the casual observer. In the not-too-distant future I'll have a page on the right way to install a diamond inlay.
This is a modern instrument. It has an inlay on the peghead that is flawless, but on the fingerboard the factory routed large cavities and used a lot of filler. However, the filler blends in pretty well and many of my guitar playing friends really like this fingerboard.