Welcome to the wonderful world of machine embroidery (ME) and AnnTheGran (ATG). ME is the most fun craft, it is beautiful, and creative, you are going to fall in love! ATG is the premiere site for ME enthusiasts because we learn and help each other. The blogs are excellent, be sure to check those out as well.
It is interesting that sometimes one persons absolute, no fail favorite is worthless in your machine. That seems to occur even with the same models. Use what works for you and from time to time, you may try something that someone suggests, but there are multiple supply options and multiple satisfied clients, and some of those criss cross in a strange matrix!
About the needle lifting the fabric. There are several reasons for this, one of which is that the digitizer failed to leave sufficient room for all the colors. Sometimes colors need to be layered such as a lady bug needs the red to leave a little space for the forthcoming black dots. As you gain experience in embroidery, you will learn to avoid certain digitizers who may or may not have had adequate training. Just like any discipline, there are good digitizers and there are the others. Some (not all) of the freebies can have the beginners.
A larger needle would not have helped in this instance, a smaller one would help more. If you adjusted the size of the design, that may have caused some of the problem. A dull needle will do the 'lifting' as well. Another thing that may help is to run your fingers through your hair (collecting natural oil) and sliding your fingers over the needle. That little bit of oil may help move the needle easier.
If you were using an adhesive stabilizer, your needle may have gotten 'gunked up' with the adhesive, try cleaning off the sticky and the hair oil together.
Got the picture? Many solutions, some may or may not work for you.
Best wishes to you and yours, Pat, The Avid Embroiderer
If you are interested in selling your projects, you can determine your costs and profits quickly with my Spreadsheet.
If you want a lot of great information on working easier, faster and more confidently on your computer, check out my Tips and Tricks.
If you want to see my pashminas (that I successfully sell retail) check them out here. I also wholesale them.