Sorry, but all you can do in AI (or any other graphics program) is to get the artwork ready - as clean and crisp as possible.
Then you have to have a program designed for embroidery. My favorite is "Embird 2004" (for editing stitch files, resizing,, converting file formats, etc) with its "Digitizing Tools" plug-in needed to digitize an embroidery stitch file. Digitizing is a matter of creating vector objects which the program can them use to create stitches. You can download a trial program of Embird 2004 (30 days or 100 uses)[$99 when purchased] and of Digitizing Tools (6,000 stitch/20 object limits in trial) [$150 when purchased. Go to the Downloads page at www.embird.biz
There are a number of programs out there, with "professional" programs being priced as much as $20,000, but Embird is comparagle for a fraction of the cost of some of the others.
The so called "automatic" programs such as Viking/Praff's "AutoDigitizing", "Generations", "Origins" and Corel's "DraWings" only create a decent design if the artwork/graphics are "camera ready" perfect and in a vector graphic such as WMF or EMF or CMX.
There are about 30 groups dedicated to Embird on Yahoo.