I also would ask myself what I'm going to embroider. If it is just for quilt labels and small motifs, the the 4X4 embroidery area may be all you need. I had my first machine for about 2 hours before I realized that I wanted a larger field. Go to Embroidery Library (a great site for designs) and browse. Look at the sizes and see if the ones that will fit your 4X4 hoop are what you had in mind vs. what is available for the 5X7.
http://www.emblibrary.com/EL/default.aspx
I can speak to the thread kit. Although it sounds like lots of $$$ after you just spent big bucks on the machine, it is really worth the investment. The kit will have all those funky colors you would never buy by the spool that will add that subtle shading to your designs and make them look gorgeous.