Invisible Machine Applique Stitch
Why Invisible Machine Appliqué? If you take a look at my Introduction to Appliqué, you can see that you can accomplish fast, nearly invisible stitches with your machine. Decide on prep method - I recommend either Turned Edge Prep or Interfacing Method, so you'll be stitching on an edge that is not raw. This is not recommended for fused edges.
First I'll have you look at our friend/designer Vicki Bellino, of Bloom Creak Designs. Here she demonstrates both the prep and the machine stitching, using invisible thread. In this method, she leaves her freezer paper templates in the piece, performs the machine stitching, then rips the freezer paper out later.
Thread? Needle size? Vicki uses a size 70/10 sewing machine needle and invisible thread.
Here's another demo, where I show you two more nearly invisible stitches, but I use matching thread instead of invisible thread.
Thread? Needle size? I used a size 70/10 sewing machine needle so I'd leave a smaller hole in my fabric, and Essential Thread. I've also liked the results of using 60 weight thread, for a finer finish.
But wait! There's more! In both of these videos, you saw stitches used that you might not have on your machine. In Beth Ferrier's book, More! Hand Appliqué by Machine, Beth tells us to use the simple old zig zag stitch with invisible thread. She keeps the stitch pretty wide, and catches one side of the stitch on the appliqué piece and one side of the stitch on the background fabric. Because it's invisible thread, you really can't see the stitches!