I've always had a hard time finding light colored fabric to use for backgrounds in my quilt blocks, so I use muslin. Works great for me. I used it in the very first quilt I made. It gets a lot of use and a lot of washing and it holds up just fine. I love it. Never have used it for a backing, but will consider it in the future. Maybe even dye it. I've thought about it before, just never have.
So many of you have said you don't use it: WHY? Any particular reason? I'm anxious to hear this. I thought muslin was a good fabric. As long as you don't get the really inexpensive quality stuff. I keep bolts of muslin on hand for many different reasons.