Thank you to everyone who wrote in with helpful hints about my glitter dot fabric fiasco. You people had a ton of good advice. You are not going to believe what actually solved my problem!
I had figured out right after I posted that the residue left on the machine needle was what was causing the skipped stitches. It came off with Goo-Gone and would sew perfectly for about 4 inches. Problem was, I had to clean it off after every 4 inches and that was taking forever. Then I checked out www.davina.org/CNSummer2002/Glittedot.html, that Dawn suggested, and one of their solutions was to use a silicone lubricant on the needle. Hmmm, don't have that, do have machine oil that is suppose to be clear and stainless. And what do you know, it worked! So now I put a drop on my needle (with the aid of the telescoping spout which came with the bottle) every 12 inches or so, and it sews up beautifully!
Here's the mystery, though. The blue dance skirt was actually the third one I made using the same fabric! I had absolutely zero problems with the first two. That was the reason for my extreme frustration. I could not figure out what had changed from the second to the third. Nothing had. So why my machine suddenly decided it didn't like sewing on confetti dot fabric, I guess I'll never know.