I used SaS lite 2 for the horse quilt, but each of the stripes was individual and the edges sewn down with decorative stitches. I did use a stabilizer for that. (I'll attach a picture to remind you what it looked like so this makes sense.) I think it depends how much quilting (If any) you are planning to do inside the applique. If you aren't doing much, I'd fuse it. If you are doing a lot, you may get away with the spray and edge stitch.
Also, one thing I found when I did my horse was that was that even though I put some quilting on the applique, (A line down between each stripe), the quilting around it was much denser and it made the applique poof out in the middle. So, that's something to think about. I ended up starching and steaming the heck out of it to get it to lie flat.
Hope that all made sense!
Watson