WOW! Thanks to MaryNanna and debbie for your comments about twin needle stitching.
It totally makes sense that the skipped stitches are from not using a ball point or stretch needle. I used the twin needle that came with the machine, which I assume is not a ball point or stretch needle.
Answering debbie's comment...
Tension issues and breaking/jamming thread- completely pull apart the bobbin area and make sure you don't have a tiny piece of thread stuck in there.
Ok, I opened up the bobbin area and cleaned it out. There wasn't anything in the bobbin area itself. I removed some lint but none of it was in the bobbin compartment itself.
Next when you're threading the needles just above the needle is a thread guide. Only the left needle goes through that guide. That one being your regular spool of thread. The extra spool completely bypasses that guide.
The manual mentioned that and I did that.
If you don't get anywhere with that try changing the direction your thread is coming off the extra spool-clockwise to counter clockwise. Usually thread jamming w/twin needles is all in the threading.
Hrmmm....Honestly I don't remember how I had the thread exit the spool on the extra holder but maybe that's it or part of it?
The only other thing I can think of is are you leaving thread tails? I try to leave them a bit longer and pull them to the right of the needle. My machine has a thread cutter and I know if I've used that it leaves really short tails that will jam with a twin needle.
I left extra long thread tails but pulled them directly to the back, not to the right. Next time I will try moving them to the right.
I did some googling since my "Singer Compete Guide to Sewing" and Built by Wendy's "Sew U Home Stretch" didn't mention twin needles in the detail I require.
I found this tutorial on threads.com that talks about how to use twin needles. Pretty awesome. Even some of the comments were helpful, as the author elaborated that the one needle should be threaded first and then the second needle threaded next (which I was doing--I was wondering if I should thread both threads together but now I know I was doing it right) but goes on to say that one thread should be on one side of the tension disk and the other on the other side of the tension disk. I can't see my tension disk but will be sure to try to put the thread through the tension disk that way. I also read somewhere that slowly sewing with a twin needle helps--which I can already confirm--it seemed to go better when I was sewing slower.
I found this Twin Needle Reference chart and this sewing machine needles overview on threads.com as well, which clarified that ballpoint needles and stretch needles are two different things (which, an hour ago, I wasn't sure about!)
So I think I will be hitting up Jo-Ann's on Tuesday night after work, looking for a stretch twin needle and buying two spools of thread that are exactly alike! And then I will play around.
Also I've been having tension issues for almost 2 years now. I used to sew wovens at a 6 and knits at a 2 or 3. Now I sew wovens at a 2 and knits usually at a 1. I don't know what happened. I know there is a way to adjust the tension through something on the back of the machine but I haven't tried that. If trying the things above don't fix the problem, then I wonder if it goes back to my ol' tension issues.
I had to do that pesky thing called cleaning my house today so no sewing was accomplished.