Cotton wadding will shrink. If you wash it before use, you end up with a smooth(-ish) quilt. If you don't prewash, it will shrink up and give the quilt the 'antique' look. Personal preference really.
Prewashing fabric will tell you if the colour runs before it dyes all your quilt (use a colour catcher sheet), and makes it easier to find the straight grain - fabric distorts as it is rolled onto the bolt. This is why you find FQs aren't always square.
If you don't prewash your fabric, the quilt police might call, but you needn't answer the door.