The Superior Threads sets that come in the round bobbin keepers are good for doing the hand applique. They are usually 50/2. Mettler "Silk", which is actually cotton thread, and Aurifil are also 50/2. Most regular piecing thread is 50/3. I am using silk on my Baltimore Album quilt, but am using the Mettler on another project. There is debate about the silk thread cutting through the cotton fabric, but I figure that won't happen until I'm long gone. You can also check out the Superior Threads website, which has a lot of good information on threads.
Use your regular C&C for doing the actual back basting. You can also use a hand-quilting thread. You want to use a larger eyed needle and thicker thread so that you can see the holes in the fabric. I am experimenting with backbasting with my sewing machine, because it goes so much faster. For that, I am using my Gutterman cotton thread.
There is a Yahoo! group for hand appliquers and for machine appliquers, and many members belong to both groups. Lots of great advice and pictures.