Before I begin cutting, I'll remove all the safety mechanisms from my table saw. Unfortunately, none of them are compatible with the dado blade. It's always nice to take a moment to appreciate how quickly this could become a "shaker style going to the hospital" post. Please note that my fingers are closer to the saw blade in some of these pictures than they should be -- that's because the saw is OFF. Please also note that I'm not wearing gloves. NEVER wear gloves when working with a power saw. If it catches the glove, it can suck your hand right in.
I found it easier to cut a dado in full lengths of 1x2 stock, then cut those pieces to the lengths I need. If I cut to length first, I end up with pieces that are too small to dado without putting my hand dangerously close to the blade. To get the groove dead center, I make one cut, then flip the board around and cut the other side. It takes a few tries on a scrap piece of wood to get the saw adjusted to the exact thickness of your plywood, but it's pretty easy-going after that. I want the groove to be exactly 1/2" deep.