some fabrics will shrink regardless of the water or dryer temperature. others won't shrink at all.
if i prewash, i usually use either cold or warm water, but the highest dryer setting. once a quilt is finished, i use cold water and the low-heat dryer setting. not for any special reason. simply because that's the way i do all my laundry.
i'm not sure there's a "right" or "wrong" way.