I also have done applique the way Arla-Jo mentioned but stitch it down like I would do needle turn applique. The edges are already securely turned under so you don't need to worry about fraying. I have used muslin and even scrap fabric on the back but you can't fuse it down unless you add a little bit of washable school glue which I use in my projects quite often.. I put a little glue on the back and press it.