Is it cutting, but not all the way through?
Your dial settings will vary depending on the type of paper you are cutting, and what font/shapes you are cutting out.
Go to
www.cricut.com and get on the message boards there. I know there are threads with "cheat sheets" giving specific dial settings for different types of paper.
When I first got mine last May from QVC, it was not cutting either. A phone call to Provocraft determined that I had some bad blades. They sent replacements in the mail. In the meantime, I went to M's and bought new blades. That solved the problem.
Hope this can be of some help to you. You will love your bug once you get it "house trained' LOL