Yes, that's a great idea. I recently helped a friend put together blocks that were signed at her son's wedding. It's going to make a beautiful quilt, and has signatures and best wishes from all their friends and families. I'm sure he and his wife will cherish that quilt forever.
I agree with LynnVT about ironing the fabric onto freezer paper first to help stabilize it. Also, adding a line, like Mona Marie suggested, would be a great idea so the guests would keep their comments and signatures within a certain space. As for what to have guests sign with, I find that the sharp-point Sharpie pens work well and the ink is permanent once it's heat set.