Needle up down moves the embroider

It's okay - it's supposed to do that! The Needle Down button has a different function when you are in Embroidery mode i.e. you have the emb. unit attached.
It moves the emb. arm forward for two reasons: so you can cut top-side jump stitches more easily between colour changes (you touch the button again and the emb. arm returns to under the needle so you can finish the design); and secondly so you can "park" the embroidery unit when you are finished. You can then turn the machine off, remove the emb. unit and replace it in the carry case. If you DON'T do this, the emb. arm is not in the right position to fit into the moulded carry case properly.

The Broken Thread message usually means that it has started the colour, but the thread has been pulled down underneath instead of making nice locked stitches. Hold onto the thread end until the machine has stopped and beeped for you to cut the thread. This usually solves that problem. Sometimes the thread gets pulled out of your hand so just back up the stitches a few and start over, holding the thread more tightly. Don't tug on the thread - just keep a firm grip.

Designer 1s often cut the bobbin thread too short so that it can't make those nice locked stitches when it starts. You need to take off the hoop, open up the bobbin cover and use your stylus, the tip of a pair of scissors, tweezers (whatever is to hand) to pull the bobbin thread out a little. Instead of cutting it on the bobbin thread cutter, just let it hang outside by 1/8" or so. That way you can be sure there is enough bobbin thread available for the stitch to lock. Don't use the scissors button on the machine after every colour change. Sure, it makes for a tidier back of the embroidery with less work for you afterwards, but if it means you are taking the hoop and bobbin cover off after every colour change then it is not worth it in time-saving.
If your machine is doing this - cutting the bobbin thread too short - mention it to your tech. when you machine goes in for its next service. He may be able to tweak the bobbin cutter so it does not cut so close.