I had problems with mine when I first got it also as the directions it came with weren't the clearest. When I first put it on, it was stopping everything too. Don't know just what your set up is, but on mine the little lever thingy (on the walking foot) on the right side (as you're looking at it on the machine) has to be above the screw that holds the needle in so that it goes up and down with the needle.
Hopefully that's clearer than mud!