Here's MY rules and why I use them (remember, there are NO quilt police!)
1) No percale sheets. Why? They are too tightly woven, the threads break instead of parting when the needle goes through. Yea, you can find some that don't, but for me, life's just too darn short and I want my quilts to last.
2) Flannel sheets are fine, as long as I can load with the stretch lengthwise on the frame and have the top going the right direction for the chosen design. Why? It allows for the stretch to be consistent (while I try to minimize the stretch). Puckers are just to easy to happen if the stretchy direction is horizontal to the bars.
3) No batiks, UNLESS it is the 108" wide specifically made for machine quilting. Sewbatik.com carries it. See rule number 1. Batiks are usually a very tight weave. It doesn't seem to matter as much on the tops, but it can become a hugh mess on the back.
For my own quilts, I look for busy fabrics so that I don't have to worry too much about what happens on the back. I really do love the SewBatik fabrics for the big quilts, and for the small ones I use Quilt Shop quality fabrics on the 40-50% off racks. As long as it'll look ok, it works for me.