Almost finished the first block today. I'm using the blanket stitch on it. In the sample, the teal piece and the lime green piece are different size stitches. I think the teal piece is really the buttonhole stitch; not sure about the stitch on the green piece as it is a different button on the machine. I've been using the stitch that is on the teal piece. May use the other stitch on bigger pieces tho. I added in some tiny zig zag stitches too and I think it's going to work ok.
Thanks to everyone for all your comments and advise. I really appreciate it.
Hopefully I will be able to post a picture of the finished block soon. We are battening down the hatches around here just in case Hurricane Isaac heads this way so it may take a little bit of time to get a photo taken and posted.