Fabric - I have two favorites, and generally buy whichever is easier for me to get in quantity. One is Kona Cotton, and the other is called "Dyer's Cloth". If you get Kona Cotton, make sure it's PFD, not the "white" or "natural" color that isn't PFD. (Although, in a pinch, I have used the white. But it's harder to work with and doesn't dye quite as intensely.) I like these as a hand dyer, as a piecer, and as a professional quilter. They accept dye well, and are nice to use afterwards.
I just discovered a web site I'm dying (no pun intended!) to order from. It's www.PFDfabrics.com, and they have white-on-white PFDs, and black printed PFDs. The examples on their site are very cool. I haven't tried them yet myself, but I'm drooling!
Fabric Preparation - Wash your fabric in Synthrapol, using the hottest water setting on your washer. I use one capful for every two yards of fabric. I also rinse a second time, mostly because I'm paranoid. If I'm dyeing the fabric right away, I don't bother drying. Otherwise, dry it and fold for later. When you're ready to dye, cut off what you're going to use and soak in water for a few minutes to moisten the fabric. (I let it soak while I get set up.)
Unless I'm doing a specific project, I like to dye fat quarters. It's a handy size and easy to work with. After washing the fabric, I tear into generous fat quarters (this is the only time I tear fabric!). I also tear "test strips" so I can keep a record of my dyeing without cutting into my fat quarters.