If you have access to an overlock machine, you'll get really good results. I've heard that people like to put woolly thread in their overlock, but I haven't tried. I like how the overlock gives me a nice stretch stitch even with regular cotton threads. The inside looks clean and professional.
If you are using a regular sewing machine, use a zigzag stitch. Play around with the width and length, but I'd start with a 2.5 in each and try to keep them the same (longer width, longer length).
I really like the walking foot. When you use that, line your fabrics up and if you need to, use pins to keep them together as you near the needle. Make sure they are feeding at the same speed (you'll notice if they aren't if one of the pieces of fabric is stretching longer than the other by the next pin).
Lower pressure setting of the pressure foot will also allow the fabric to feed "easier", without it stretching as it sews, so it'll help the two pieces of fabric feed at the same rate.