I don't normally prewash fabric, but I do prewash and dry flannel -- twice! It can shrink an enormous amount.
My favorite approach, after shrinking the flannel, is to starch it before cutting so it doesn't move around or stretch with handling. To do this I mix a 1:1 solution of Sta-Flo liquid starch and water, "paint" it on the fabric with a large housepainting brush, throw the saturated fabric in the dryer, and iron with steam. Cuts are very accurate after it has been starched in this way.
I also use 1/2-inch seams with flannel rather than 1/4-inch to accommodate any fraying on the cut edges.