I use old jeans for potholders, quilts, lots of things. Yes, embroidery looks great on old denim and if you soil the potholder, dont worry about it-just throw it in the washer-don't have to worry about fading or shrinking. I never throw old jeans away and once your friends find out you use them you should have plenty.
I also use several layers of old t-shirts for the batting, its cotton so it conducts heat but thin enough to make them useable.