What embroidery machine to buy is a personal choice--based on your needs, space and money.
The question of whether to wash your fabric first has been discussed at length many times on the board. Here are a few threads to read to get your started. You can search "washing fabric" or "prewashing fabric" and find more threads.
http://www.quiltingboard.com/t-34282-1.htm
http://www.quiltingboard.com/t-28012-1.htm
http://www.quiltingboard.com/t-31223-1.htm