Most of the fiber from domestic sheep has two qualities that distinguish it from hair or fur: it is scaled in such a way that it helps the animal move out burrs and seeds that might embed themselves into its skin; and it is crimped, in some fleeces more than 20 bends per inch.
Both the scaling and the crimp make it possible to spin and felt the fleece. They help the individual fibers "grab" each other so that they stay together. They also make the product retain heat, as they trap heat in their bends. Insulation also works the both ways; bedouins and tuaregs use wool clothes to keep the heat out.
The amount of crimp corresponds with the fineness of the wool fibers. A fine wool like merino may have up to a hundred crimps per inch, where the coarser wools like karakul may have as few as one to two crimps per inch.
Hair, by contrast, has little if any scale and no crimp and little ability to bind into yarn. On sheep, the hair part of the fleece is called kemp. The relative amounts of kemp to wool vary from breed to breed, and make some fleeces more desirable for spinning, felting or carding into batts for quilts or other insulating products.
Wool grows in several natural colors such as black, brown (also called moorit) grey and the most commonly available white. Wool of any color takes dye easily and can be felted.
Wool straight off a sheep is highly water-resistant. It is said to be "in the grease", the grease being lanolin, and can be worked into yarn and knit into water-resistant mittens, as did the Aran Island fishermen. Wool retains heat better than most fabrics when wet.
The spinning capacity of wool is determined by the technique known as wool classing, whereby a qualified woolclasser might group wools of similar gradings together to maximise the return for a farmer wishing to yield the most from the sheep's fleeces.
Source:http://www.apparelsearch.com/Definitions/Fiber/Wool_definition.htm