Don't fail to neglect reverse needles, and their edge hogging abilities. The tactic of reverse needling mid combat or to fight them off the stag is very interesting. It will usually throw them off a bit, depending on their experience level. It can also be used when you wave land across a platform into a reverse needle needle storm, with a combo ensuing, depending on what character you are playing against/number of needles that hit them/percent/location, etc.
Needle skills are essential for effectively breaking the flow of any character who is approaching or is in "the zone". Being able to more efficiently use needles in this way should progress your sheik.
As far as other uses of needles, most have been mentioned above.
Needle camping, edge guard (against Fox/Falco), needle grab.
Things not to do.
Don't spam needles while on the ground. The throw animation is pretty lengthy, and if you are not throwing a lot of needles out there and aren't sure one of them isn't going to hit, you probably shouldn't. Chances are you are going to get a smash attack to the face/throw combo, etc. It is important to know the overall angles of the needles, distance they travel, distance they travel if/when they are reflected. Also make sure you know how many needles you have. If you become predictable with your needle usage you may be getting one back to the face.
It is important to usually throw an even amount of needles in order to prevent the chances of being struck by one of them if they are power shielded, shined. The even amount of needles will cancel out each other and the counter assault will be void.
All in all, needles are great for mind games, advanced tactics, and can be generally fun and flashy (yet effective). It is important not to over use needles, as I'm sure most people know Sheik possesses an innumerable amount of other awesome moves.
All things in moderation, even moderation. Sometimes mix it up with a little bit of needle spamming, just to piss your opponent off.
