I have done some appliques lately for the kids and just love doing it. Not technically hard (except for drawing in reverse on the fusible stuff...). If you need to make a personalized gift, this is the way to go - people are never underwhelmed when they see it.
Here are couple of little bucket hats I made - one for a friend's kiddo and one for mine.
And, here is the birthday boy shirt I made for my youngest for the big bash. A proud number one on the back. Since he's generally crawling somewhere very quickly I thought a one on the front would be a loss. There is also a star on the front pocket but no good pictures of it. I love this picture of my boys...