I recently bought a merino wool shirt. I've been stress testing the thing, using it during bicycle workouts and such.
Good:
– I can't notice I'm sweating in it, even when I am
– It doesn't really retain an odor
– It dries in a pretty good amount of time
Bad:
– It kind of smells like a sheep, but it's not a bad smell Especially when I work out and get it wet. I don't think anyone else can smell it although. (Asked a few friends if they could smell the sheep smell, they couldn't unless they put their nose right on the shirt)
– It gets minorly itchy, especially when I sweat, get it wet, or rub it on my skin (backpacks, etc)
– It's not as comfortable as a cotton shirt, I keep on putting on my cotton & bamboo shirts back on.
It's gone through 4 work out days, and I haven't washed it yet. I'm wondering if washing it once would make the itch go away or not, but I'm still testing it to see how long it takes for it to pickup an odor. I bought my shirt from MEC
( http://www.mec.ca/Products/product_detail.jsp?PRODUCT%3C%3Eprd_id=845524442620709&FOLDER%3C%3Efolder_id=2534374302699185&bmUID=1214015131151 ) so maybe you guys w/ other brands of merino wool shirts have a different experience and it's just my shirt. If so, please post!
I would definitely go with merino wool if I can fix the itch problem. I kind of wish was as smooth as a bamboo shirt, but bamboo is even worse than cotton in retaining water. Supposedly it has the same "odor free" properties of a merino wool shirt, but the water retention just makes me feel nasty.

