I just finished a quilt top and from the beginning I planned to use a sheet. When I mentioned this to the LQS owner she was very discouraging. Said she'd rather see me use muslin than a sheet. Hmmmm. Glad this thread came up - I'm going to go with the sheet. I've heard that the sheet will not last as well, will fade, etc, but the quilt I made is for lovin' not for an heirloom and we're going to love with a sheet.
I don't think she was just trying to sell her muslin - this is a small town and I've knew the lady years before she opened this shop.