I like using freezer paper for my templates. I then use starch and an iron to make my shapes. I use neutral silk #100 thread to hand applique. I have three spools: a light tan, dark tan, and a medium green. I only use the heat resistant template plastic for templates that I am using over and over. If I'm doing machine applique, I use Sulky monofilament (not nylon) thread.
If you need some tutorials on the starch method, check out Erin Russek's blog:
http://erinrussek.typepad.com/one-pi...lique-lessons/
LeAnne