I've not used that yarn, but I have knit with a cotton yarn with elastic in it. It's 98.3% cotton and 1.7% elastic. I've made several pair of sock with it and am currently working on a T shirt using it. I really like it for socks though it's definitely not as soft as wool.
I like the machine washability and the socks look tiny after they come out of the dryer, but they stretch right back to normal size when you put them on.
I've been using Elann Esprit http://www.elann.com/productdisp.asp...erBy=&Count=16
Cascade yarns also has an identical yarn called Fixation.
If you check Ravelry or Elann or Cascade you can find patterns using their yarns with the elastic and might give you a better idea if you want to try Paton's yarn.