I'm also pretty picky about the thread I use for applique. Even if the colors are awesome, if it knots a lot, I won't use it. Applique is one of the ways I relax and it's not relaxing if you have to be coping with knots in your thread all of the time.
When I was at Salt Lake, we were doing our usual socializing and lo and behold, my good friend Sue Spargo is a distributor for an Italian cotton thread that she uses for applique. It took no time at all before I was back at her booth with my trusty sewing kit. We got our heads together and picked out threads to match the ones I had been using.
Sue swears by this thread for cotton, wool and velvet. I've used it since I got back from Salt Lake and absolutely love it for cotton - sure the same will apply to wool and velvet. I use wool occasionally, velvet very rarely and cotton is my first love. The thread is great! It sews up beautifully and there is very little knotting.
We have a limited selection - 24 colors - but so far they've been enough for me. If you need anything I don't have, go to her website she carries a lot more of the brighter, etc colors. You can buy it from us individually or in color packs for a discount. Just have us throw in a spool or 2 or 4 when you order a pattern or a kit. Or buy it all on it's own - it's worth it.
On a totally different note, we found a left brain error in the instructions & diagram for our Lilac Hill quilt. We're emailing the corrections to our Club people so watch for them if you got a kit. For those of you who bought a pattern or got a kit elsewhere go to the corrections page in our store or email Byron at email@example.com and we'll email or send the correction diagram & instructions.