I do quite a lot of hand dyeing and I don't really care what anyone says, I can tell a difference in the color and the feel of a cheap muslin versus a better quality fabric. It doesn't necessarily have to be a PFD - I use some higher quality muslin to dye sometimes - but I get the best results when I use the Kona PFD. And honestly, it's not that expensive when I buy a bolt of it from Joann's with a 50% off coupon (or the 40% coupon, depending on what I have on hand).
I love Dharma's dyes, and their customer service is excellent. But whatever you do, don't skimp on the fabric. Why spend all that time and effort (and the money to buy the dye) and then use it on cheap muslin?
I never pre-wash my fabric, by the way, regardless of whether I use a muslin. I do always always always soak in soda ash solution. And I rarely use urea. I've done four lots this week already, and they are just beautiful. The one thing I've learned is to just experiment with it and play around to see how things work. I keep copious notes and swatches so I can replicate results and sometimes, so I can avoid certain results.
Good luck and most of all, have fun!