Hi Linda
You can just use plain old embroidery floss to work it. Use a nice bright red and two strands of thread.
As for the fabric - if the muslin is nice and heavy, by all means use it. A light weight calico is also good.
As you will be using such a strong colour, then remember to soak your floss in cold wather with some salt added before you use it to ensure that any residual colour is released.
Just take the wrappers off the floss, and put it straight in the water - you don;t need to unskein it and then lay it in the sun to dry.
Hope that this helps