How do I choose the needle?
You should consider the large-eye needles, such as the craft needles with round and blunted ends. You will need common craft thread and needles as well.

Do I need anything else to finish the rug?
Sure, you will need clamps to hold your fabric in place. In addition, you will need clothespins, which you can use to secure the ends of your braided rug while adding lace. The last item you will need is a non-slip mat/pad. You want to slip the pad beneath the rug once you are finished. Then display some rustic bath accessories.