I have a Pfaff 332 Automatic which is the machine I learned to sew on, so I've used it for many years. I think it is the model very much like yours but the previous model.
Candace is correct in that the embroidery insert (or Automatic Unit) is likely frozen from old oil and lack of use. Twenty-some years ago an old sewing machine repairman told me that my machine would outlive him and me both and that the only problem typically found was they could become frozen if not used. I've never had to unstick mine but every few years I run it through the decorative stitches to keep it moving and lightly oil. I don't really use them otherwise. However, since it is a built-in camstack the same methods used on other machines can be used on the Pfaffs. Usually for the stuck ones, kerosene or Kroil is recommended. I've successfully used kerosene and it really doesn't take much (unless it's a rustbucket). I take a small jar with a little kerosene and use Q-tips and cottonballs to give it a sponge bath. Wiggle the parts and trace the linkages and try to get every joint. The old oil turns into a varnish and you have to break the seal but be gentle, especially since some of your knobs are plastic. Let it sit and soak, even for days. You can also start with just sewing machine oil or Tri-Flow. The top will just pop off and you can trace what the knobs turn to see where it may be stuck. Here is the Automatic Unit removed, which will give you an idea of the part you're dealing with:
http://www.yaya-online.com/-e-n-/shpSR.php?A=116
I am a member of a couple of yahoo groups (oldpfaffpforum and pfaff_fixit) which are good sources of information and a place where you can find not only user manuals but usually service manuals as well.
My strongest caution is that be very very careful with any oils or other liquids when you are working on it and don't get ANY on either belt, which are cotton with metal cleats. Liquids will cause them to fail and belts can be hard to find (and timing belts may be impossible to find).
Otherwise, they are fantastic machines. Mine has done everything from silk wedding dresses to upholstery and leather.
Good luck and enjoy your new machine.
John