I get mine from fabric.com or hancocks_paduccah.com. They have good selections. I have been told that one should never use a sheet, as a high thread count means you will be going through the weaving threads, weakening the resulting quilt. I do, however use flannel sheets on baby or child quilts.
I also buy the backing fabrics to cut and use as backgrounds. They are often cheaper per yard and quite versatile, especially the tone on tone ones. Using plain muslin extrawides works well and is inexpensive, but shows off any problems with your quilting.
I much prefer to work with unpieced backs. I do all my work on my home machine most of the time and I prefer not to have anything that feels like a crease coming through from the back.