The needle will point toward the mouse pointer and make a stitch in that direction. Click spacebar to make a stitch after putting the mouse in the direction where you want the needle to sew.
I found a thing called "pen" so I used that to make a needle and thread project, which 'sews' stitches. I used 'pen up' and 'pen down'. I initially thought I would use clones of a stitch sprite, but this works really well, as all I wanted was a mark on a page, not anything interactive. It is tricky to do fancy stitches - actual emboidery type stuff, as you have to take into account the length of the needle and the travel of that sprite to make the stitch. Running stitch works really well though. I think to build on this project, I will make projects where you can embroider 'real' embroidery stitches and also change the embroidery floss.