I have a few favorite sites that I would like to share with you.
www.bunnycup.com--this site has about 45 SETS of designs that are free for the downloading. they stitch out nicely and they have great sales. mostly children's designs, but really nice.
www.designsbyjuju.com
again, children's designs but there is an awesome sale going on right now. I think you get five sets for $20 and they always stitch out great!
I am an addict with my embroidery machine, but it is an expensive addiction!