I am also not good at applique so I have tried preparing my pieces like this and am getting better:

I make my templates out of watercolor paper you can get it at any hobby/craft/art store. It is very heavy weight like card stock. I cut out my fabric with a very generous allowance, sometimes up to a half inch. I use the card stock template to press my edges under as heat from the iron won't affect it. Once my piece is prepared I remove the template then use Arlene's Tacky glue to glue the turned under edge in place. Also around curves and such I make sure I notch or clip the seam allowance so the fabric curves smoother. I still do not get the amazing results I see here but I am getting better. The glue helps a lot and will wash out and I can prepare pieces well in advance and not worry about my pressed under seam allowance losing that crisp edge.

Looking at your first photo, with the machine applique stitch, I'm not sure that is actually the best stitch for this technique. Also, the settings don't look quite right.

The blind hem stitch on my machine, which is the one I use for machine applique, has 4 straight stitches before it makes the zag into the applique; yours has only 2. When I use this stitch, I set the stitch length very short and the stitch width very narrow; your stitches are very long and wide compared to mine. By any chance are you using a pre-set stitch with non-adjustable length and width settings?

A great book that helped me a lot with invisible machine applique is the one by Harriet Hargrave:
http://www.amazon.com/Mastering-Mach...dp/157120136X/

I watched her videos and it looks like she is making wall hangings. I wonder how well that raw edge technique would hold up for an actual blanket quilt that would be washed periodically...

I set them as small as I could. The machine is messed up. All the decorative stiches r not working right. I am afraid it is going to have to go for repair. Thanks for the advice.