Leah at Sew Spoiled has updated a tutorial on Machine Appliqué Embroidery. It has a list of materials and full step-by-step instructions with lots of pictures.
HTC Retail’s Trans-Web, 4000-7, http://www.htc-retail.com/product-info.php?pid39.html is an ideal choice for this application. It is a fusible web that bonds to any fabric without stitching, great for appliqués.
For more information, visit http://sewspoiled.blogspot.com/2011/12/embroidery-machine-applique-tutorial.html