Felting is where you take fibers and felt them with hot water and/or friction to create a sturdy fabric. It's also called fulling. Boiled wool is felted wool. You can manually manipulate the fibers, or use a special felting needle & pad. the felting needle is actually a group of needles set in a base. You lay the loose fibers (or loosely woven fibers) on the pad and plunge the needle over and over thru the fibers and into the pad. It takes forever! A felting machine basically automates this by having a group of needles that plunge repeatedly into the item being felted. Felting depends on the loose fibers being matted together to form a unified whole. My Viking dealer was trying to get me to buy one when I was making a lot of felted bags, but I decided against it. Not every fiber will felt and my gut reaction is that cotton fabrics don't have the proper fiber type to felt to each other.
Maybe someone who has one can try and (hopefully) prove me wrong!