I don't know if you have received an answer to your question, so here the answers to both questions.
The needle has a vertical groove that goes to teh left side of the machine. The thread will go through from the groove side, or left to right.
Depending on the needle size, you will typcially use V69, V92 or V138 thread. The larger the thread the larger the needle. 140 needles will work fine with V69 sewing fabric. You can go up to 150 needles for sewing vinyl and for V92 or V138 thread.
If I remember correctly, the H3 version takes a 134/35 system neeedle and the H4 version (higher lift) takes a 190R needle.
Steve M
December 2009