I don't really do any hand applique so I would suggest machine. but I learned of a new fusible, Bosal #345, over the weekend and it is nice stuff. it holds well and it is thin enough thtat the fabric doesn't feel like it has fusible under it.
Now to convince my LQS to bring it in for me.
If you wanted to after you fused the appique you could just quilt and stitch the edges all at once. it's great for smaller projects like wall hangings. one less step to the finished project.