The verdict is in! I have tried the following threads for applique:
1. Gutterman Silk 30 wt. (the pink thread)
2. YLI Silk (the taupe thread)
3. Mettler Cotton 60 wt. (the green thread)
4. DMC cotton 50 wt. (the blue thread)
My thread of choice is the DMC cotton 50 wt. It is a very thin thread and works nicely. I like the YLI silk too, but it frays too much when using. The Gutterman Silk ($3.60 for 110 yds) was good too, but it is more difficult for me to get and it costs more than the DMC ($2.80 for approx 5oo yds). I'm sure that I'll be using all of these brands as I have several spools of each, but future applique thread purchases will be the DMC.