Generations 1.6 Help Needed!

Hello. I am at my wits end! I am trying to do some very basic stuff with Generations, and am not getting the desired results. I am very frustrated.

Problem #1
I scanned a very simple line drawing, but need to clean it up - lines are 'fuzzy' on computer. I tried sewing it out, but the lines were very scraggly, and the thread kept breaking. I suspect I didn't do something properly while dizitizing, since the machine is brand new and properly threaded, the thread and needle are new as well.

Problem #2
I opened up a three-letter monogram (Embroidery Arts Gothic #4) in Generations. Each letter is two colors - the outline color, and the body both in a satin stitch. When sewing out, there were no stops to change thread color, and after the first letter sewed out, instead of going on to the middle letter, the machine started sewing out the first initial right over the first first sew-out.

Can anybody please help. What am I doing wrong? How can I get the machine to stop for thread color changes, and move on to the next letter in the monogram?