I was hesitant to join and swaps for a long time, just because I was so scared that the people receiving my blocks or fabric would be disappointed in my work/fabric choices.
I have done two block swaps in the past year, the black and white, and the blue and white, and I got fantastic blocks in exchange for mine. I was very happy to include blocks that were more technically difficult and ones that were more simple in my quilt, because for real, everyone has to start learning somewhere. If we drew the line at only experienced quilters joining, then guess what, I wouldn't be included either! I haven't put my blue and white quilt together yet, but I won first place in a fair last summer with my black and white swap quilt.
I'm also doing the IRR right now, which has me stressed because I don't want to ruin someone else's beautiful work. However, when I have an idea about my round, I post and ask questions and opinions and advice and people so far have been great.
I do prefer to work with unwashed fabric, but I make exceptions for the swaps, it's only fair. I don't think I have any Wal-Mart fabric, but if the quality is decent I wouldn't object to buying it. I work in a fabric store, our quilting section does not have any garbage quality fabric, so I simply cannot justify paying the quilt shop prices of 15-18$ /meter unless I'm looking for something specific and cannot find it elsewhere. I also look out for sales on good fabric, knowing I'm going to want to send some FQs along with my things, and I often send a whole meter of fabric instead of cutting it up... the FQs in my store are 4.99 each, and I can often get a whole meter for that price on fabric on sale. So far, I have NEVER gotten any complaints about the quality of fabric I use from any swappers. If you use your head when buying fabric for swaps, there shouldn't be any problems.