I have to agree with everyone about getting one that will work with a USB. I also think you would be much happier with the option of doing designs at least 5x7. I have a Brother that I am happy with, My friend has both a Jenome and Singer that she loves.
There is a free software called Wilcon Truesizer. I am not sure what all it can do but I have used it to change formats and enlarge designs. My [used from Craigslist] machine came with PEDesign lite which is not user friendly for this user at least but can be figured out to do a little merging.
There is lots of information re embroidery machines on www.sewforum.com that might help you with your decision. Have fun!