They look great!  One thing to add might be a seam down the front, if I were you I'd do that with a displacement or bump map.  About the hem edges, you don't have to do that as a soft decorated group, but you do seem to have it working well anyhow :)  What I do that also works is assign the hem vertices to a group with different fold resistance etc.  If you want to look at the settings I used you're welcome to them:
http://sites.google.com/site/fleshforge/Home/free-stuff-1/irina-sp3-dynamic-sheath-dress
http://sites.google.com/site/fleshforge/Home/free-stuff-1/gillian-dynamic-dress-v4

The settings and groups should be saved into the PP2 file and pop up when you set up a coth simulation for that prop.

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