I recently completed a great little rag quilt using denim and khaki on one side and "former" plaid shirts on the other... I cut 8" blocks, used a 1" seam and snipped about every 3-4/8". After washing and drying it (at the laundromat, due to massive fluff!!), it frayed up quite nicely! I used no batting.
I'm now collecting more old shirts for another denim quilt!!