Alright: so here's the report on some fatwood I've been using. The bit was harvested from a ponderosa pine snag and was totally dry. I used my RatManDu so make tiny shavings (I placed the edge perpendicular to the wood and scraped back and forth, so it was basically dust. I then pressed most of the dust into a tight ball, and placed it on the end of a very thin oak skewer. I tried to light this with my ferro rod, but I didn't have much luck because the ball was so compact. I then mixed the remaining unused dust with magnesium shavings and then ignited the pile with a ferro striker. With this burning pile, I lit the ball and then put the flaming hunk of compressed fatwood-dust into my tinder (oak curls) at the heart of my pre-laid fire. Then voila, I was in business.

Fatwood vs. cotton

fatwood:
-burns longer
-available in nature (therefore you can gather more if you run out)

cotton:
-much easier to ignite
-lighter

Bottom line: if you have both, use fatwood for kindling and cotton for tinder. With tinder, the most important aspect (In my opinion and experience) is how easily it takes a spark. No doubt, cotton catches quicker.