I've never tried using elastic stretchy yarns in fair-isle. Not sure if it will be good or not. Give it a try, and let us know!
I learned Fair Isle from Nancy Schroyer
. She taught a class at SAFF
, and was just amazing! She owns Nancy's Knit Knacks
She recommended using yarn in a DK or finer weight, because anything thicker than that usually makes the finished item too heavy and thick to wear comfortably. No mention of anything besides wool, so we are on our own trying different fibers.