Best Applique fabric?

[Tricia]

I've been experimenting with appliques and I would like experienced advice here:

Doing applique initials on Baby Sleepers---
Can I use any type of fabric? I'm sure some types are difficult to work with or don't hold up.
Interfacing recommended? I purchased a roll of interfacing from Madiera and it crinkles after washing--not a good look!

For letters/names on sweatshirts I'd like to get that athletic "felt" look--exactly what kind of material is used and where if your favorite place to get it?

[Steve I]

You can get the felt from Stahls or Dalco. It has an adhesive back that you heat press after sewing and it locks the fabric in place. No more wrinkles after washing.

Steve I.
Trinity Embroidery