Everyone has different opinion about pre-washing. Pre-washing simply means to wash your fabric before you cut into them and start sewing. The benefit of pre-washing is that you will wash away excess dye to reduce possible color bleeding. Reds, blues and purple fabrics are notorious for bleeding, so I sometimes pre-wash when I have high contrast colors such as red and white. While I acknowledge that not pre-washing these fabrics is a "risk," often times, I skip pre-washing and use Shout Color Catchers when I wash my quilt for the first time. Typically, these Color Catchers do the trick, but if I ever find bleeding in my quilt after the first wash, I would rather deal with the aftermath than take the time to prewash. This comes down to personal preference and how much you want to be adventurous with it (or not).
Most fabric manufacturers use starch and stabilizers on their fabrics to keep the fibers stiff while they're on the bolt. When you wash your fabric, either before it's in the quilt or after, you wash away that starch. Personally, I like the added stiffness, as it makes for cutting and sewing to be easier. But if you choose to prewash you may decide that you want to add some starch back to the fabric to make it easier to work with.
Some quilters also choose to pre-wash so that they "pre-shrink" their fabric. This makes a difference if you are using various fabric types within your quilt. For example, linen shrinks at a different rate than cotton does. If you use both types of fabric within your quilt, once they shrink they could cause areas of pulling on your seams. If you go ahead and pre-wash/pre-shrink everything, then the fabrics in your quilt will all behave similarly, which will in turn give you a more stable quilt. That being said, I can probably count on one hand the amount of times that I've pre-washed my fabric.
How to Prewash:
Wash fabrics in cool water with a mild detergent. Feel free to use a mesh bag to prevent fabric from stretching or twisting. Dry on low heat and remove the fabrics from the dryer immediately once it's dry. For yardage, re-align selvedges and press the fabric to create a new fold. Most people do not pre-wash pre-cuts because if the fabric frays too much, you might not have the designated amount that you need for your project. Some people also “stay-stitch” about 1/8" away from the perimeter of the edges to help prevent the fabric from unraveling too much.
Again, pre-washing is one of those a highly debated topic in the quilting world, so don't feel like there's a right or wrong answer. :)