Your PE700 II is one terrific machine. It does so much to make embroidery more simple and beautiful. Unfortunately, you will get the bug, sooner or later, to get a bigger, better machine. (Just a little forewarning!)
A couple of things come to mind on the threader issue. First is, are you sure you are using a shank needle? A shank needle has a flat side and some needles are round, and don't work on this machine. The shank is to position your needle correctly so that the threader can work correctly.
Even if you are using a shank, did you place the flat side to the back of the machine? It can be placed eslewhere making the threader unusable.
Lastly, you may be using a needle smaller than a size 11. Sometimes a size 10 will work with the threader, but a size 9 or smaller will not. The position and size of the eye does not work for that machine. I think that would be an issue for just about any machine. The threader does not have a large area to work in; otherwise the threader would not be successful. Precision is the key for a good threader.
Let us know if any of that works for you. If this is your first needle change, it must be a new machine. You can call your technician tomorrow if all else fails.
Pat, The Avid Embroiderer