Manual stitches give you more control to digitize an exact outline. Where you place the points is where your needle penetrations will be without extra needle penetrations in between. You can only use straight points for digitizing a manual stitch. This type of element is usually used for items where you want to be able to determine where your needle penetrations are. This is located as a toolbar button, in the Insert Menu and also by right clicking in the View Window.
If a point is entered incorrectly, pressing the Backspace key will remove the input points in reverse order.