Wool is a block in vanilla minecraft with a few more uses in hexxit
Vanilla
Wool is collected by killing or shearing sheep. Its main purpose is to be a dyable decorative block, and is used in making a bed.
Hexxit
In addition to vanilla methods of obtaining wool, Hexxit introduces cotton plants, which produce cotton when harvested. Nine cotton placed in a crafting grid can create one block of wool.
Wool can be made into cloth armor (not to be confused with soulweave ) and dyed blue, light blue, green, lime, or red to make colored cloth armor.
Wool is also used in various crafting recipes in different mods in hexxit.