well, I got a pant pattern for the wool by the yard and I'm wondering...could I use this on the body of a sweater to make longies from the whole sweater rather then just the sleeves?

of course! Fabric is fabric regardless of where it's found :)

Felting the sweater a bit will keep edges from fraying when you cut and might make it a bit easier to work with.

yeah, I felted it lightly (no dog sweaters for me LOL!) is there anything I should do differently with sewing...anyone made a pair like this?