The speed of your machine should match the speed you move your fabric around.
If your fabric is "dragging" on your machine, you might consider investing in a teflon slider so you don't feel like you are "fighting" the fabric as you FMQ.
If you needle is shredding the thread, the eye of the needle is probably too small for the thread you are using. I recently took several classes in FMQ and the teachers recommended using a 90/14 Topstitch needle as these have bigger eyes and will accommodate just about any thread.