I love hand applique too. I am taking a class at my LQS - we are doing a Baltimore basket as a center for a quilt and will start the other blocks in January. I enjoy it so, but I work very slowly so I am always behind in the class...especially because I like it to be as near perfect as possible and keep taking appliques off and starting them over again.
The teacher/shop owner encouraged us to use a board (I think its a June Taylor thing) and I love it. I like to sit up in bed with the board on my lap and I just got a little LED clip on lamp which clips to the edge of the board. The 2 dogs and cat can sleep all around me when I am sewing, but sometimes when I put the board down, Winnie, the cat gets onto it to sleep (he must like the padding) and he sheds!
Geckogirl - what kind of questions do you have about felt applique? I have done a bit of wool felt applique and would be glad to help you. I have a lovely book of wool applique throws/baby blankets etc, by someone from Australia. I can't remember the name but when I get home I can look for it and let you know.