Flannel makes a wonderfully cuddly backing. As others have said - prewash it. Prewash it in the harshest conditions you can dream up = hot water, heavy detergent and hot rinse, and hot dryer. That way the 'damage' is done before you get it into your quilt and no matter what that quilt goes through later, the flannel won't present a problem.
Flannel is great not only for kid's quilts, but also for lap quilts and quilts for people in wheelchairs. The flannel clings to your clothes, or the bed, and won't let the quilt slip off.