I have used quilts for sheets and they were fine. My first large bed sized quilt (in the late 1870's) was a king size with a lovely blue green scene of water and palm trees -- I hand embroidered the quilt through the batting and backing echoing the entire pattern and adding some detail that was not in it. It was a bit harder to get through the sheets, but some ivory soap worked to help get the needle through the layers. It came out beautiful -- and I wish I still had it. When we moved to a new house, it had a different color scheme and DH took it to Goodwill one day since it was "just sitting around" -- I cried.
At church, we use sheets all the time for our charity quilts -- they hold up much better than pieced quilts since we tie them. We get some beautiful patterns at Goodwill, etc and love them.