A cloud sea must surely give some of the finest hillwalking conditions, walking in often crystal clear air above valleys hidden below the swirling cloud tops or blurred under a layer of hazy polluted air.
Modest British hills can feel positively Alpine! 
And the expectations, first plodding up in thick mist, then sensing a brightness in the cloud above the pace quickens with the pale disk of the sun intermittently visible through the cloud. Will it be low enough? Should I have chosen a bigger hill? Suddenly clear air bursts in, distant hills are revealed as islands in this all too temporary and rare ocean..the day will be a classic! 
Inversions come in two types, the early morning valley fog type being quite common, the inversion aloft being the rarer and more desirable condition.
 

Ground or nocturnal Inversions
Mountain areas often produce morning valley fog after a clear night where air near the damp ground has cooled by radiation. As the cool air is heavier it stays in the valleys, leaving the tops in clear warmer air. The sun will normally destroy this effect within a few hours of rising.

Stratus cloud forming in valley bottom in early morning

Inversion aloft
Rarer is an inversion aloft, which may last all day, and is typified by warm clear air and blue skies above thick low cloud. A layer of warmer air exists between colder air below and above (possibly caused by anticyclonic subsidence or cool sea breezes undercutting warmer air [sea breeze inversion]). If this layer dips below summit level clouds at the top of the lower cold layer will appear as a cloud sea from summits.

Inversion at about 2500' on Snowdon (present all day)
 

How do I recognise one from valley level?
The only possible indicators I am aware of are:-
High pressure, very low cloud or fog - without precipitation*, possibly combined with low wind strength, although the one photographed on Snowdon above had a strong breeze below the inversion and still air in the warm layer.

*I have report of inversion on Cuillin with drizzle in Glenbrittle.

When do they occur?
Autumn/Winter mornings coupled with the presence of a high pressure system seems to be the best time. 
 

Mountain Weather David Pedgley Cicerone 1980 (second edition now available)
Mountaincraft and Leadership (in part)Eric Langmuir Scottish Sports Council 1984