Watch the Banjo Roll: Solo 1 online guitar lesson by Joe Dalton from Big Twang
The picking hand is key here. I use the pick and finger technique. A thumb pick and fingers also works fine. First get the pattern together slowly. Speed it up gradually. Aside from the obvious application of bluegrass style numbers, bluegrass banjo sounds are used as busy rhythmic pads in contemporary country songs.
This banjo roll skill adds depth to your bag of tricks and more flash to your performance. Check out Arlen Roth's playing on "Rooster". He will also add this effect in the most ingenious way in some unexpected but very effective places in other styles as well.