Katie
I just did autoTrace on Justin's Example, and I got 9 paths. I hid all but the path for the outline and got a nice path of the outline only. I think that worked well because of the dark image of the dog.
I tried AutoTracing a screenshot (PNG) of the second picture of the dog after SVG conversion and got 170 paths and did not get one clean outline path to cut an outline with. I expanded up the one path to see if I might find a clear path there and it had over 3000 anchor points. So this image obviously would not work.
So I tried the AutoTrace feature with a picture of the statue of Liberty we took recently. I removed the background first and it did a nice job getting an outline I could trace. (I added the original picture here to show the original, but I did not Autotrace that one; I autotraced the one with removed background.
Katie, Have you used the new K12 option for Cuttle?
Lucie