I am a machine piecer and quilter but you can do both by hand. Actually my blog (Joystitch Knits and Bits) shows a couple of quilts I am working on using hand stitched applique, the chick one is using the needleturn applique method and the Nah's ark one (which I am about to start) uses applique that is ironed onto the backing piece using fusible webbing and then hand stitched down using button hole stitch. I have used this technique on a few of my previous quilts too (like the couple of dolls quilts and the sailing boat on a baby quilt that you can see a few posts back or in teh flickr link at the side). I generally do the hand applique then stitch the squares together by machine but you could do the whole thing by hand - it's just much faster by machine. Then to hand quilt, you sandwich the quilt using your pieced top, pieced or plain backing and then a layer of batting in between. You baste them together using basting pins (sharp saefty pins) or tacking stitch by hand. For handquilting you need a tiny needle (called a quilting between) and a hoop and thimble (or else you'll put holes in your fingers as I painfully discovered once!). You need a special hand quilting thread which is normally thicker than standard cotton, and waxed, although some people use DMC threads as they prefer the sheen. Hoop the work area you are quilting and make it nice and tight like a drum, then you weave the thread in and out using a rocking motion with your thimble on, trying to get a) even stitches and b) same size stitches on both the frnt and back of teh quilt. If you only catch a few threads on the back, the thread can cut through the fabric so don't worry about stitch size as much as you worry about a) and b). Start with bigger stitches and as you improve you can use smaller stitches on your next quilt.