ANSWER - Well its nothing I've ever come across before. And the reason I've been a bit slow answering this is because I've asked a few other witches as well and none of them have come across it either. (So that is six witches in total who don't have a clue as to why you need to put cotton under your bed!) I can only assume if this medium is genuine is that it is something to do with drawing whatever spell she believes has been cast on you out of you. But such a practise doesn't have its roots in any tradition that I have ever heard of. To be honest I don't think this woman has much of a clue what she is talking about. And what does she mean by saying you've had "witchcraft done on you..."? Does she mean a witch has cast a spell on you? If so there are far more effective protections than sticking a sewing kit under your bed. I'd give this medium a wide berth if I were you. Some mediums are excellent and very genuine, some sadly rely on trickery to get your interest and she sounds like the latter to me.
Image http://www.sxc.hu/photo/95843 (Viks)