I have made several rag quilts and usually make them with flannel on both sides and batting in the middle, with 1/2" seams. They are warm and cuddly and my grandkids love them. You do have to cut the batting 1" smaller than the squares and you must sew an X. I also recently made a strip rag quilt and did not use any batting and there is no need to sew an X. It was super easy. here is a link if you are interested.
http://www.quiltingboard.com/t-107067-1.htm