Another board member just gave me a link to this applique video by Sharon Schamber. She uses Liquid Stitch on the edges to seal them so they won't fray. Apply the applique piece to the block and then press with a dry iron. Then you can stitch it down with any stitch you choose to use. This glue is permanent but it is soft and flexible when dry. The result is that the appliqued piece won't have the stiffness that a fusible will give you so your block will stay nice and soft. Check it out! I am using this method on a baby quilt.
http://www.youtube.com/user/SharonSc...18/lb-Qcu2K8lk