Mousie...just to confuse you more :wink:...you could do a "prepared" machine applique. By that I mean turn under the edges, but then stitch it down with the any type of stitch you would like on your machine. With the turned under edges, no fraying. You could turn it with stabalizer or freezer paper.
When Kathy tells you "open satin stitch", she means that you turn the dial on your machine to open the stitch into a tight zig zag vs. the very very close stitch on the satin stitch. The benefit being that it takes a bit less thread and is quicker to me.
I'd love to start seeing some of the people starting the project now...Hopefully we'll get to see some pics soon!