Here is a short description of how you need to hoop along with a picture.
I use medium stabilizer in my hoop.
I use Charmin Ultra. I use the top sheet of the Toilet Paper. Some fold 3 or 4 sheets of TP folded up and I float it in the hoop like the picture.
You can find my Toilet Paper Designs here: http://www.wingsicalwhims.com/store/c3/Toilet_Paper.html
These are a lot of fun to make and give out as gifts.