FJ, it's intarsia knitting, stranded knitting (can also be referred to as fair-isle although technically different). You knit from a chart (because yes, it's upside down). One big thing to remember though is to twist the yarns around each other as you change colours or you end up with holes. Doesn't work for circular knitting, only flat knitting because you have to carry the other colour around with you on circ knitting and that takes away from the stretch of the knitting. On flat knit it's okay because you go back and forward across the rows to pick it up on the same side you finished on.

hth