Over the years I have made many quilts using machine applique. I like the look of the machine blanket stitch, particularly because it is neater than what I can do by hand, although I have done it by hand when working with wool. The first time I used machine applique I noticed that the foot was in the way of my seeing where the needle was touching the fabric, on the edge of the piece as well as inside the applique piece. So, I ran to the quilt store and ordered a presser foot with a clear sole (see http://www.berninausa.com/product_detail-n25-i290-sUS.html), in my case the Bernina foot 34. Now, I can easily see the needle as it works through my project, since it is important that the red line be to the left of the edge of the applique piece: how much to the left depends on how long into the piece you want the stitch to reach. On the example below, since I wanted a longer stitch, I ensured the left line was a bit farther from the edge of the yellow circle, and the blanket stitch is visible in its entirety, without leaving a space between the edge of the circle and where the stitch lays on the lilac petal.
Great tip!