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What is the best way to hem a dress that is cut on the bias?
First the hem must be narrow. I don't know of any way to do it except with the help of a friend to measure from the floor to a certain height all around the skirt and place pins close together to get an even line. This will give you a place to start; cut the material all around using the pin line for a guide. Then hem as you normally would. Hand hemming will present the best appearance as these kinds of skirts will not hang even unless they are exactly right. But, my, do they look nice when well done as they tend to "float".
What ChloeElizabeth said, but first let the dress hang from a padded hanger for at least 24 hours. Doing so permits the fabric to relax into the 'hand' it's always going to have-hemming it too soon will give it an uneven appearance and take away from all your hard work.
*The way a fabric lays and hangs on you is called the hand. Some fabrics have a different hand depending on the construction and laundering method used.*
If you don't have a friend to help you mark your hem, after its hung for at least 24 hours, gently press the garment then turn it inside out and fold it in half the long way (up the middle along the skirt>bodice>neckline), making sure the side-underarm, and shoulder seams meet evenly at the fold.
Following the curve along the hemline area, trim the hem so that the folded skirt edge is even-don't take off too much (less is more, and easier to correct:), or 'square' the hem as a bias skirt is meant to be slightly circular, and squaring it will be a horrible mistake!
Next, use a seam gauge with the slider set at 1/4" , and place the end of the seam gauge at the raw edge with the slider lying on the skirt.
Fold the raw edge up to the slider on the gauge and go along the raw edge of the skirt, pinning as you go to, until you have the entire raw edge of the hemline area folded up to 1/4" and pinned in place.
*Note: you'll have to 'ease' as you go around the hem area as you are working with a curved shape-it's normal, just make a tiny little pleat and remember when sewing it to run the needle and thread through that pleat so your hem doesn't sag*
Press the fold, remove the pins, then fold up again and pin. Then press in the new fold-voila! You have a narrow, 1/2" hem in your skirt marked and ready to sew. :)
Finally, hem using one of these stitches found here (good step-by-step pictures including machine and hand stitching):
This one is really great, but only shows machine stitching with a specialised foot you may not have: