Back in the day there was only one way to cut appliques- by hand! Now we have die cutting machines, laser cutting machines and the cutting needles in our sewing computer machines. I have tried all these methods and they all have specific advantages and disadvantages which depend on the intricacy of the design. I don't mind cutting out simple designs by hand. The price is right!
I used my Accuquilt die cutting machine to cut out the alphabet letters for these pillow cases. I applied Heat and Bond light weight fusible to the wrong side of the fabric with the paper still attached before I cut out the shapes. The results were very, very clean. From there you either stitch them on manually with a decorative stitch which is quite tedious or you purchase the coordinating software to stitch out a placement line and the decorative perimeter stitching. The end results are very professional. If you prefer the look of hand stitches then the manual method may be more to your liking. Thankfully my sewing machine has the 'hover' feature which makes the manual method a great deal easier but I still find the process quite tedious. The Bernina 'knee lift' is also a great help.
Our sewing world continues to grow every day with all these new toys to make things more fun ! The end results are really great !