It's standard vinyl- avery but I forget the exact type. It doesn't have any grooves but as with the MH871 I just line the rollers up about 1-1/2" to 2" off the edges and then float the center one wherever.
I can't really upload an example since its white vinyl and hard to see- but basically when I cut out a word, the letters end up overlapping or not making complete shapes because the cut doesn't line back up with itself- if that makes sense?
Blade height and pressure are set correctly- the first few shapes on each cut are fine and the further down the vinyl roll it goes, the more the alignment gets screwed up.