That is really, really cute!
I've never heard of fusible thread applique. I assume you satin-stitch around the (raw?) edge with fusible thread, then iron to melt it. Is that right? If so, I hardly see an advantage to that over using regular thread for satin stitching.
Edit: Googled it and came up with this website:
http://www.byannie.com/images/fusibl...structions.jpg
Just wondering, would you use this technique again?