The introduction of appliques to your digitizing projects can reap both creative and practical rewards. The use of appliques can allow you to reduce the stitch count of your designs by as much as 80%. This will, of course, reduce the sewing time by almost as much, once you factor in the extra time necessary to place and tack down the applique or appliques.
Another benefit of using appliques, especially in large designs, is that it can be used to replace large areas of fill stitches, which can tend to make the design area stiff and uncomfortable to wear.
Digitizing
If your software has an automatic applique function (as in KPD Compositions Pro), the following steps will be added for you. First a placement line (running stitch)is digitized and followed by a stop code or color change. This will stop the design so that you can lay down the applique. Next a tack down stitch (either a zig zag or running stitch) is digitized so that the applique will be secured to the base fabric and then the applique is finished off with either a zig zag or satin stitch.
Techniques
There are a few different ways to cut out the appliques, and the choice of technique is based upon the amount of designs in the job order and the frequency that you use appliques in your designs.
Hand-cut
Hand cutting your designs is the most labor intensive and is a practical alternative only for very small jobs or samples or in an emergency when there is no time to send out the fabric to be cut. There are two methods commonly used, template and cutting on the machine. To create a template for your applique, hoop a light cardboard on you machine and sew out the applique placement line on the cardboard. You can then cut along the perforations and use this template to trace out and cut your appliques. You may also choose to cut the appliques in the hoop. To do this, digitize your tack down stitch inside the middle of the finishing satin stitch. Place a square of appliques fabric large enough to cover the entire appliqued area, and stitch it down. The remove the hoop from the machine and use a pair of applique scissors, cut along the outside edge of the applique, then place the hoop back on the machine and resume sewing.
CAD Cut
If you do a lot of applique work you might want to invest in a CAD cutter to use to cut them in-house. You can export a cut file from your software to run the machine and to assure that the applique is going to fit in your design perfectly.
Laser or water-jet cut
If you use appliques infrequently it would probably be best to send your digitized file to an applique cutting facility, the turn around time for this service can be as quick as 24-48 hours.
If your applique are large enough you might want to invest in a laser cutter or a beam laser. The advantage of a beam laser is that it allows you to cut either single or multiple appliques on the embroidery machine, which expedites the entire process.

Every type of fabric has its own unique charactoristics, and its own challenges. Knits are no exception, needle type, backing, hooping, thread tension and proper digitizing all need to work together to produce the perfect end result.
Needle
To avoid cutting the fibers of the knit use a ball-point needle, a 75/11 should work well for any weight knit.
Backing
Tear-away backing is always the prefered choice as it is the least labor intensive to remove. however some knits are too delicate and can tear during the embroidery process so you need to turn to a no-show or organza backing which will afford more support without adding more bulk to the garment.
ToppingIf you are embroidering on a knit with a patterned texture such as pique, herringbone, birds-eye or cableknit you probably want to use a topping to flatten out the surface before you embroidery upon it.
Hooping
you do not want to stretch to knit in the hoop (with the exception of Spandex, which should be slightly stretched) you want to maake sure that your backing is tight in the hoop and the knit lies flat on top of it.
Tension
Because knits are less stable than woven fabrics they will cause satin stitches to pull in more and become thinner, especially if your thread tension is too tight. It is important to set your top tension looser than you would for a woven fabric and make sure that you bobbin tension is also loosened to make sure they are working together.
Digitizing
When digitizing for knits underlay and increased pull compensation are very important concerns. Use a lattice underlay under fills to minimise distortion and perpendicular underlay under satins to create a good base for the top stitching.
Embroidering on knits is no more difficult than anything else. If you understand why problems may occur they are much more easily remedied.

I separated the design above by color to illustrate how you can easily you can create not only the illusion of volume but also the subtle variation from one color to another.
Keep Stitch Directions Consistant
If you are trying to blend different colors together make sure that the stitch directions are parallel this will create a smooth transition from one color to another.
Decrease The Density of Overlapping Colors
Take into consideration the overall density, if you have a density of 60 stitches per inch in each of two overlapping fills or columns, the final density is the total of both or 120 Sttiches per inch, which will create a very dense and hard feeling finished embroidery. however if you reduce the individual densities to 35 stitches per inch you will end up with only 70 stitches per inch and a much more pleasing outcome.
Use a Jagged Edge to overlap Different Colors
Colors blend better if the eges that overlap are irregular. two straight edges will create a more obvious line where they meet than two jagged ones.
Vary Stitch Direction To Define Different Planes
When I tried to differenciate between the outside of the plums and the cut edge of the center, I changed the direction of the stitches and created the two separate planes of the object. The more that you want to differenciate these shapes the more of an angle you want to place the two diffent directions of stitching.
Blending different colors smoothly is easy and can add a lot of depth to your finished embroidery if you just keep these simple steps in mind.

Before you start sewing out you first garment it is usally a good idea to check the size and placement as it relates to the garment you are embroidering on.
KPD Compositions allows you to choose from 20 different garment and home decor items all in a wide range of sizes so that you can "virtually" check your placement before you start hooping them.