I regularily use the Fraser and Kirkbright wool. I find the selvedge fine for casual kilts. It has some marks from the loom on the selvedge but, as I said, it's fine for casual kilts.
I have a 4 yard selvedged Classic Cut and a 6 yard fringed Grizzly Cut in my new MacBitseach tartan. (Jimmy, you'd love a F&K Grizzly Cut! They're softer than peach fuzz and lighter than American beer!)
For traditional kilts, the selvedge would have to be hemmed under. I'm told this also increases the sway and flow of the pleats. I'll let you know about that when I get my Celtic Pride.