I am so interested in doing applique these days. I have got to get my Dresden Plate project finished. I only have two more plates to do and the blocks will be done.
There is a great method for turning perfect circle edges that I have been using. I think I have blogged about it before, but here is a re-cap.
You cut your circles using Perfect Circles plastic templates. Trace around the template that is the size you need for your project--trace on the wrong side of your fabric. Cut it out, leaving an approximate quarter inch seam allowance. Do a running stitch all around the circle, about an eighth of an inch from the cut edge. Lay the template over the traced line of the circle and pull the threads taut. Dab the edges with spray starch on a small brush and carefully iron the edges. Don't iron directly over the bare plastic template because it will warp and be ruined. Don't ask me how I know this.
And there you go. They aren't kidding--Perfect Circles!