I know there are many more ways of doing applique other just than machine buttonhole and so have been doing a little trawling looking for links
This looks like a good post about hand applique with detailed pictures to accompany the steps.
Misty Trees, towards the end of this video they discuss preparation for raw edge applique
The above video leads onto machine applique by same person
Freezer Paper Technique by Connecting Threads
This video teaches you how to do freezer paper applique for quilts and other projects. For this method, you will need household freezer paper, a mini iron, and matching or monofilament thread.
It is by Vicki Bellino of Bloom Creek, exclusively for www.connectingthreads.com and discusses both hand and machine applique and thread and needle choice
Sew like My Mom also takes you through the machine button hole method with step by step photos. A long and detailed post worth reading for anyone who is new to this.
As a final comment if you want fantastic applique block you could try what I did in one block.... I asked Merelyn Pearce to make it for me. Merelyn lives just down the road from me and happily made the block. It was my good luck charm, or good luck block. For those who don't know about Merelyn she has won Best of Australia five times at least and does some of the tiniest applique you could ever hope to see.... actually it is so tiny you can't see her stitches at all.