Rebecca, I used a Schmetz metallic needle size 80/12 and I was using the Sulky Metallic thread. It worked just fine as long as I was in the body of the quilt, but when I came to the applique, it was too fine to get through even that small amount of glue, so it was refusing to sew through it, or it was shredding as it sewed. So, I changed to a universal 100/16 (I know, that's huge!) to get through the applique, then changed back to the other needle for the parts that weren't appliqued. It was more time consuming, but it got the job done.
What I learned was that if I'm going to be adhering my applique and I want to use a fine thread to quilt, then I need to use only a narrow strip (¼") of adhesive around my applique pattern so that I don't have to quilt through a whole design and change needles to accomodate that thickness.
I've found that thread shredding is usually due to the wrong needle for the thread I'm using, or my tension is off. In this case, I knew it was the needle because the tension was fine whenever I wasn't working on an area of applique.
I've never used metallic in the bobbin. That scares me! LOL I love to use a really fine thread in the bobbin unless I'm trying to make a statement on the back of the quilt. Ususally I'll use either YLI Lingerie & Bobbin thread or Bottom Line Bobbin thread.