Asa's tip finally reminded me that I wanted to write a tip about this a while ago. I have been sewing with knits for a while now and every now and then I come across some really tightly knitted fabrics which bunch up on my sewing machine if I try to do the simple zig zag stitch. I also have problems with skipped stitches.
But try the 3-step zig zag stitch on your machine. It works like a charm. The hem is sretchy and is very strong too. I use the default setting on my machine although I've shortened the stitch width for doing edgestitching on some tops.
Like always, do try some sample first to get a "feel" for the stitch and decide which one looks the best. I hardly ever used this stitch before but now its one of my favorite stitches.
I like to attatch samples to my notebook for later reference.