Yep, wool and polyester fleece are great diaper covers! Plus, you can make pants that double as diaper covers. Old sweaters are great to recycle into covers, and the arms can be used to make pants/longies. Here are a couple of links with free patterns: http://katrinassqs.blogspot.com/
(there is a column on the right of the page with pattern links) and http://marthasworld76.blogspot.com/2007/05/how-to-make-wool-soaker-from-recycled.html
. You can make diapers out of just about any cotton material. Flannel is fabulous, as are old t-shirts. Good luck!