I haven't had any problems with the silk. If the quilt is going to subjected to hard use, I'd probably rethink doing hand needle turned applique anyway, and go for a machine technique.
Some people don't care for how silk handles - it's slippery! But I like that I only need 5 different colors to handle most applique situations, and the thin thread disappears into the applique so the stitches aren't visible.
Again, if I had a close, local source I'd go for fine cotton, but since I don't, I'll stick to the silk for now. With the cotton I'd need to match the thread closer to the applique than I do with the silk.
Janet