I have seen and read where some shows do not find machine sewn binding appropriate, but I do not know about applique. I would also recommend that you contact the shows or fairs you want to enter your quilts in and see what their policies are on this. There may also be different rules for "art" quilts, I know landscapes are in a different catagory and quilters use raw edge applique there and machine stitch around the edges or stipple them down.