I have stayed away from REGULAR graphite pencils (the ones we all used in school and every day) since I saw a gorgeous antique quilt in the Kimball Museum in Fort Worth, TX many, many years ago. It had been hand pieced, appliqued, and hand quilted, and marked with a pencil whose lines were still prominently evident on the quilt over 125 years later. To me, as a quilter, it didn't really detract from the appeal of the quilt -- because it just added to the charm and history of it -- but I knew then I didn't want pencil marks on my own quilts. I don't expect them to be hanging in a respected museum a century from now!
I use a water washable graphite drawing pencil from General. For me it works well on light or dark fabrics and washes out when I wash my quilts after binding them.
Jan in VA