If your horse will get turned out in his blankets, definitely go with turnouts. They can be worn inside as well. The only difference is the gussets in the turnouts that allow for freer movement.
As far as the denier, the higher the number, the tighter the weave. Look for a blanket that has reinforced straps, a higher D, and waterproofing.
Sheets don't do much to keep a horse warm, but do help keep them clean, especially the night before a show when it's too warm for a blanket.
Eta: also look for ripstop and a lining over the withers that protects the mane. And make sure you measure your horse properly.
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Last edited by aforred; 07-11-2012 at 02:28 PM.