Bender board will contain the rock and give the new patio its shape. Use stakes to install sturdy bender board or edging material along the painted lines. If the patio will bump up against existing stairs, secure 1/8" edging material against the wood to keep it from rotting over time.
It doesn't take much to kill grass this short: Just cut off the light. Lay down a layer of landscape fabric to kill off the grass in the patio area and prevent weeds from coming up through the rock. Use landscape staples to secure the fabric to the ground, making sure the fabric doesn't overlap too much.
Decomposed granite is perfect for the patio surface. It compacts for a stable surface but lets water trickle through instead of pooling on top. Still, you'll want to slope the decomposed granite away from the house 1/8" to 1/4" per foot to insure that water doesn't come back into the house. Use a heavy-duty rake to spread the gravel evenly throughout the patio.
Use a plate compactor (rent for roughly $60 a day) to tamp down the rock. Remember, make sure to pick a rock – like decomposed granite – that compacts well but doesn't pack too tightly for water to get through. Run the compactor over the surface several times, checking for humps and slope.
Wear safety glasses and ear protection when working with the plate compactor. These powerful machines can be difficult to control; if you're not confident you can control the compactor safely, get help or call in a pro.