All insulin pumps use needles, sorry. Each pump company has many different infusion sets to choose from. With a lot of infusion sets, when you put a new one on, there's the thin, flexible plastic cannula with a needle in the middle of it. You put the needle/cannula in, and pull the actual needle out, leaving the soft cannula inside you, which you can't feel at all.
With most insulin pumps, you actually have to check your blood sugar more often than when you use MDI (Multiple Daily Injections) therapy. The reason being, with an insulin pump you only use fast/rapid acting insulin. So while you are less likely to go low when using pump therapy, it's easier to go high. Not because the pump doesn't work as well as shots, but because if you get a bad infusion set or it gets kinked, the insulin can't get through. But most pumps have alarms for that.
While they do not yet have actual insulin pumps that monitor your blood sugar, they DO have Integrated Continuous Glucose Monitoring Systems (CGMS) with the Medtronic Minimed pump, and the Animas pump company and Insulet (Omnipod) company are both working on getting CGMS's with their pumps.
The downside with any CGMS is that you have to put another infusion set in just for that. Also, they are not 100% accurate, especially when you are out of range. For example, your CGMS could say that you're 80mg/dL and dropping, but you can really be in the 40s or 50s. Same as when your blood sugar is high. So if you use a CGMS, you ALWAYS want to do a finger-stick to double-check if before you do a bolus correction or something.
I hope this helps!