Problems showing on the bottom generally mean tension problems on the top. The needle breaks also imply something wrong in the threading, perhaps the thread getting caught under the spool. I would first double check your threading. I have a Handiquilter Sweet 16 and the threading is somewhat different than a domestic sewing machine. Any time I have threading problems I completely unthread the machine and rethread from scratch.
Have you done free motion quilting on another machine? If not, realize you've got a significant learning curve in front of you. Even if you've done it on another machine, each new machine has some learning curve as you adjust your hand motion to the speed of the specific machine. I would recommend starting with some gentle curves and just getting familiar with the machine on some scrap quilt sandwiches.
Good luck and don't toss it! You'll get the hang of it.
Pam