I have used it to back quilts and I really like it, especially for baby quilts. I have always used inexpensive flannel (the kind that sells for something like $3 or $4 a yard at Jo-Anns) and it has held up fine. My daughter's favorite baby quilt has been washed probably a hundred times and it's back with flannel and tied! LOL* It's worn but still loved.
I have also used flannel in place of batting - I don't remember where I heard you could do that but I experimented with it. I wasn't crazy about how it quilted, it didn't have enough loft for my taste so I'll probably just stick to using it for backing from now on.