From the pages of QuiltPox.com
Use up those old dryer sheets! If you use the fabric type of dryer sheets, save them to use for applique. Then all you have to do is face one right side together with your applique shape, sew about 1/8" seam allowance. Then, very carefully snip a hold in the dryer sheet. You will then flip the applique piece right-side out through that hole. Be sure to smooth out the seam allowance and press. To go one step further, once the applique piece is nice and pressed, you can turn it over and trim out the excess dryer sheet.
What you are left with is a "needle-turned" applique piece. Pin or glue baste it to your background fabric, and machine or hand applique stitch it in place. Kewl huh?