Reddit mentions of The Triumph of the Embryo

The growth of digits is signaled by a gradient of the protein shh (sonic hedgehog). The distinction between one digit and the next is dictated by a threshold concentration of the signaling molecule. See: Wolpert's French Flag Model

In general, the developmental process is a result of the cumulative action of these signals. For instance, action of the different HOX genes along the anterior-posterior axis patterns vertebral identity, initiating expression of different signals within each segment; that's how cells "know" they're part of an arm or not. Gradients within these segments pattern the mediolateral and dorsal-ventral axes.

That's my best attempt at recalling an animal development class from two years ago. If you want a good resource on this topic, I'd suggest Wolpert's Triumph of the Embryo; it can be found cheaply if you don't mind buying used.

http://www.amazon.com/Triumph-Embryo-Lewis-Wolpert/dp/0198547994

EDIT: Changed ssh to shh; definitely didn't mean secure shell.