I've got a Cuttlebug. I mostly use it for paper, but it cuts felt quite nicely! :-D
I haven't tried cutting cotton fabric, but I bet it would do it. The only problem I see is that the pieces would be small, depending on what die you used.
Have y'all seen the Spellbinders dies? Those are awesome! Pricey, though. I just have one set, but wish I could afford them all.