Okay...I've drawn a very crude example of how it works. I hope it's not so crude that you can't see what I'm trying to illustrate. Okay, the bearing (slider thing) allows the shank (the inside part of the bit that the blades are attached to and the bearing sits around) to spin inside of it indepentantly of the spinning of the bearing. So (DON'T TRY THIS!!!) you could actually hold onto the bearing so it was not moving while the bit spins through the middle of it upwards of 20,000 RPMs. If you look at the illustration you will see that the blades would cut into the board up to the point where the bearing hits the other board. Now you cand just run the router all the way around the edges of your side panels and the blade will cut the bottom board until it looks exactly like the top board.
Keep in mind that the bit can be moved up and down on a router so you can position the blade so it is only touching the board you want to cut and the bearing so it is only touching the board you don't want to cut.
Also, the boards in my picture are obviously not to scale. Routers are small and easy to handle (though extremely powerful. Be careful, and trust me, you've never seen sawdust until you've used a router. Wear eye protection and a dust mask. A good drill spins a bit about 2,500 RPMs. A router spins a bit up to 30,000 RPMs.)
By the way, a template bit or flush trim bit will work. The only difference is that on a template bit the bearing is at the top (closest to the part of the shank that fits into the router) while a flush trim bit has the bearing on bottom. Either will work just as well (though I'm partial to the template bit cos you can see what you're doing better); you would just flip the boards you're cutting over for one or the other. For a flush trim bit you put your pattern board on bottom and the board to be cut on top. Vice versa for the pattern bit.
edit: ah...I just noticed that you've used a slot cutter. I guess I didn't need to explain the size of a router and the fact that the bit can be moved up and down.
