Use any size needle or yarn! It really depends on the use of the finished project. For a tablecovering or doily, the smaller needles and #10 or #20 threads are perfect and provide the best detail and stitch definition. Mercerized Cotton blocks the best and has a gorgeous sheen. I use alot of Valley Cotton products from Yarn.com (WEBS).
Then, some people make them into blankets from needles anywhere from size 4(US) to 8(US) and worsted weight yarns.
My favorite yarn/thread size is 5/2 Mercerized but love the 3/2 Mercerized and 8/2 Cotton Linen as well.
I've done the Alita Egeblad
and Stor Lyesdug