I've used Pebeo, Lumiere, Neopaque, Jacquard Textile Color, and Dye-na-flow. They're all very fun. It all depends on the look you want.
The Pebeo Setacolor can give you a wonderful watercolor effect and you can sun print with it if desired. I painted a sunset panel with this that I'm currently putting into my latest quilt. (The "pond" quilt in my profile.) I had PFD cotton on hand that I prepared myself by washing in Synthrapol so that's what I used. I spritzed it with water and used a sponge brush to apply the watered-down paint. Very fun!
The Lumiere gives a lot of shimmer. If that's what you're aiming for, go for it -- it provides lovely results as well. It sits on top of the fabric so I didn't find that you needed to prepare the fabric in any way.
I use the Neopaque and Textile Color for more detailed work and use a regular paintbrush. It stays where you put it. (I used these in my pond quilt as well.)
The Dye-na-Flow will soak into the fabric and "flow" out more. Great for making "blobs" of color.
Just make sure whatever paint you use, you follow the directions for setting it. I haven't used paints on a quilt that will be washed necessarily -- mostly wallhangings. But I still set them as directed. You never know!
If you want to prewash the muslin, I would just wash it regularly but maybe skip the fabric softener. If the teacher didn't say to prewash though, it most likely isn't a big deal.
Let us know how the class goes!
