I summarized some of my thoughts on sewing with knits here:
I hope that helps! Knits are great.
I sewed with knits a lot in college, but my stitching wasn't quite right back then - a lot of the stitches have broken where I've stretched the item over or around something, and I've got holes along the seamlines because I didn't use a ball point needle.
Recently, I decided it was time to conquer this problem, and I consulted my sewing machine manual.
SHORT stitch length (almost as short as it goes, if it's super-stretchy fabric), and yes, a slight zig-zag or special stretch stitch. Ball point needle, or very very very sharp/new needle if you don't want holes later. STRETCH while you sew. This used to mean that I'd guess at the seam allowance, and sometimes take way too much. Now I DRAW the seamline on the fabric with chalk or water-erasable marker. Much better. PRESS your hems, because you'll need to stretch it while you sew, and you can't just hope you've folded over the right amount.
For super-stretchy fabrics, you may want to widen the stitch width a little more, and shorten the stitch length even more. Tried this recently with a slinky-slippery knit, and it totally worked. No more lettuce edge! I also played with the tension a bit to get the hems just right. For that, I recommend trying it on a scrap until it looks right. (All on a conventional machine, by the way. I have an overlocker, love it, but I tend not to sew seams with it. Plus, you can't sew a dart with a serger - not unless you're absolutely sure it's where you want it.)
If you're gathering anything, I suggest basting the gathers in place as you want them to look before you sew the seam. Having to stretch the seam while you sew can distort gathers.
For thread breaks have you changed the needle recently to a new (ball point)one? also try totally re threading the machine.
Trouble shooting breaking threads I found this site through my quilting activities on line and the information is all totally valid for whatever machine sewing you are doing.