I'm with Suzanne - I prewash to remove the chemicals. I haven't experienced any side effects, but I don't want to either.
I also prewash for bleed and shrinkage. I wash reds and blues, and all batiks twice.
My fabrics are washed as soon as they enter the house, that way I never have to wonder "has it been washed", or wait to use it cause it hasn't.
For these reasons the smallest piece of fabric I buy is a fat quarter. I wash them on a "hand wash" cycle and dry them.