You didn't answer the question. Just say it, you'll fell better. We're all here to support you and it's ok.
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Where you want the stitching depends on what you're making. If the hem will see a lot of abrasion, you might want the stitch close to the edges to reduce areas of the hem that might catch on stuff.
For a 1/2" hem, I use the width of the foot as a guide for rolling. My machine has L/C/R needle positions, which are spaced about 1/8" apart. For a general hem, I'll stitch the inside of the hem first (needle in the Left position), then sew another line at the outside (needle in the Right position). I just line the edge of the material up with the edge of the foot.
Once you get more comfortable working with the machine, you'll find that sewing faster actually gives you a straighter stitch - to a degree. For me there's a "sweet spot" on the speed and it just takes some practice to find it.
Usually a hem doesn't need to be sealed for water - it's on the outside of the piece, not in the middle where you would need water protection. Seams in the middle of tarps and such need to be sealed, of course.
You want to keep your stitch as close to the inside of the hem (where the fabric folds) as possible. If you are doing a double stitch, do the inside first. You can look at almost any piece of clothing and get an idea of where it should be.
Since you are starting out you may want to sew a little more toward the middle/outside edge until you get comfortable sewing.
EDIT:
This is how I do a roll hem when making a hammock. As others have said, different stitches for different applications.
Those are difficult questions to answer without knowing what type of seam you are using or what you are trying to make. Here is a link that may shed some light on the subject.
http://www.thru-hiker.com/workshop.asp?subcat=11&cid=14
Strike this as these are for seams and not hems. Still good info though, just doesn't apply to your question.
thanks for all the info
I thought of another question. Do you trim off the excess (loose) edges before you hem or just make them hem larger then trim.
I think you would want to do any trimming before hemming. After all, hemming is supposed to cover up all loose edges.
I just fold those frayed edges into the hem.