It also contains lanolin, a natural oil, which makes it resist water. Pile is a good insulator as well. Be careful with cotton because it absorbs and retains moisture. This can be a dangerous situation, especially with hypothermia. On the other hand, cotton's absorbing ability can be put to good use in hot conditions.
Polypropylene is also a good wool substitute.
It wicks water away from the body, but it is used mostly for long underwear. Down fills are good because they are lightweight and breathable, but you must remember that when down gets wet it looses all of it's insulating properties and it takes a long time to dry out. If you are hiking in very wet climates, you may choose to use a synthetic fill, like Polar Guard, instead. A good way to keep excess water and other objects from entering your boots is to wear gaiters. When you wear them use a shingling effect by putting your pant legs on the outside of the gaiters and the gaiters on the outside of the top of the boots.