You have it exactly. People who do complex lace will put a stitch marker between each repeat of the pattern horizontally and a lifeline between each repeat of the pattern vertically. If you have every dropped a stitch in lace knitting, you know that it can be nearly impossible to rework those stitches again. A life line every pattern repeat or every X number of rows insure you only have to tear back a few rows instead of having to start fresh. I generally used undyed crochet cotton thread. I have a monster spool of it that I use for any number of purposes. It's generally fine enough not to stretch out the stitches, it won't shed or discolor your knitting and it doesn't catch on yarns when you yank it out.