If you've purchased an antique or used machine and do not plan on buying a set of new needles, there are several things to check.

*Check that your needles are all the same type and size.
*Check for any rust that might snag yarn or keep the latches from moving smoothly.
*Look for any bent needles and either try to bend them back or replace them.
*Bend bent latches back so they move back and forth smoothly.

THINGS TO LOOK AT IF YOU ARE HAVING TROUBLE WITH DROPPED STITCHES:
(this is for the auto knitter, but it applies to many of the makes of machines)

YARN: Use sport weight for the standard 60-needle cylinder, 2/8's for the 80. Loosen tensions if you are using heavier yarns. Generally speaking, wool is easier to work than synthetics. The yarn should be strong and fairly consistent in thickness. Heavily dyed yarns tend to be a bit stiff and also do not wear as well in sock feet.

NEEDLES: Bent needles will probably drop. Check them by closing the latch to see if it lines up with the end of the needle, and by placing them on a flat surface (such as the crescent that comes with the machine) to see if they are bent. If a needle drops consistently, try replacing it even if it does not appear to be bent. Rib needle latches, except when they are knitting, may be open or closed. They do not necessarily close until the stitch slides off as the new stitch is formed. After a rib needle drops a stitch, the latch may stay closed, so it will not pick up until you open the latch again.

ADJUSTMENTS: 
TENSION: If the cylinder tension is very loose, stitches can slide off the needles. For leg warmers or scarves, try lowering (loosening) the numbered adjusting knob on the cam wing one full turn. You should not need to change the rib tension. The rib tension pointer should be between the middle and the inside (toward the dial post) of the adjustment range. The 80/40 set requires slightly tighter tension (toward the outside). Recheck your timing any time you make a significant change in tension. Standard tension gives about 1" to each five turns on the foot of a sock. When measuring the work on the machine, allow a little for the pull of the weights.
TIMING: The yarn should contact the rib needle about half way between the hinge of the latch and the point of the needle as the top of the preceding cylinder needle comes down level with the top of the cylinder. The timing adjustment screw should be in the middle range of its slot; if it is at either end of the machine is definitely out of time. To adjust it, loosen the timing screw. Move the tappet plate until the yarn contacts the needle properly, and then tighten the screw firmly. Timing can get out of adjustment if the machine jams and is forced. Go slowly when a knot is being knit in. Be sure to pull down steadily on the work as you knit; stitches can slide off or jam up if they work up on the needles. Watch especially on the left where the fin on the underside of the dial meets the dial adjuster lever. If your arm gets tired, you're probably pulling down too hard. Use a lighter touch on the heel hook when it is being used during the increasing half of heels and toes. 
The position of the yarn carrier is important, and can get shifted or sometimes bent by accident. Check to see that it is close to both sets of needles, but be sure it is not hitting them. The crescent should  just nicely fit between the rib needles and the underside of the yarn carrier. If the yarn carrier is hitting needles you will probably see scratches on it, and needles will get bent. If you raise or lower the ribber height, remember to also adjust the yarn carrier. A clean, well-oiled ribber works best. To clean, remove the ribber from the machine. Loosen the set screw at the top of the ribber arm and remove the ribber arm, tappet plate and dial from the dial post. Clean the parts with a rag and/or brush, especially the dial slots and underside of the tappet plate. To reassemble, put a few drops of oil on the post, then replace the dial, tappet plate and ribber arm, holding the parts together well as you tighten the set screw firmly. Also put oil all around the top of the dial. I normally use 30 weight zoom spout oil on the machines. When you replace the ribber on the machine, remember to check the location of the dial fin. To clean the cylinder, take out the needles; then remove the two screws on the bottom edge of the cylinder that holds it in place. Lift it out. Clean with a brush and mineral spirits, following manufacturer's directions for careful use. While the cylinder is out you can lift off the cam shell and gear. ring and clean them also. When replacing the gear ring, center the yarn carrier between the U and the T on the crank wheel. Check p.31 of the AK instruction book to get the upthrow cams in right side up. Oil where the gear ring and cam shell come together, where the cylinder needles meet the cam shell, and around the cylinder cams.