I had much better luck with the embroidery machine last night.
I picked up 3 different types of micro fiber cloth. I started with the cheapest one first. It embroidered wonderfully. I had a few problems but worked past it.
So the machine is a sensitive to the type of cloth as much as the type of thread. Well I am ok with that. As long as I can find some combinations that I like I am fine with keeping it limited.
The most striking difference between the cloths is the "Stretch". The velvet is on a very stretchy base - almost a spandex. The microfiber has very little give to it.
Thinking back the best velvet print I had I used 2 layers of stabilizer. I think the machine just does not like stretchy fabrics. Too much give in the cloth. So I will try doubling up on my stabilizer and see if that makes the difference.
I am still fighting with top thread tension, but I think I am making some progress on figuring it all out. I thought the tension disk was jamed and took the machine apart twice until I figured it out. The disk locks open when you raise the foot. This way you can easily pull the thread to remove the hoop. Ah HA!
So now I know not to "test" the top thread tension until the foot is down. That explains my wildly varied results!
I want to do a few more test prints and then I will switch to bag making mode. Thought I do need to figure out how to do button holes. Eather get a replacement button hole attachment for my sewing machine. Or figure out a way to do it on the embroidery machine.