Summer cardigown I definitely would wear out and about, and have, generally with jeans type thing.
Winter ones you also could, and I have done, but they are longer so its harder to not look dressing gown-ish.
Regarding the bobbling - this was a real problem, particularly Winter 08/09 when they changed from the angora blend the one that had a high merino wool content. I actually wrote to them about it I was so dissapointed as the colourways that year were, in my opinion, one of the best years.
The ones they launched last winter 09/10 were the best yet for bobbling - I have the one in "denim" which is a dusty grey/blue and whilst it hasn't had as much wear as the year before because I gave birth in October and had the post-pregnancy sweats (!) until about January, it seems to be a LOT more durable. I think they have got it right this time so if yours is from another year and you are otherwise a fan, you might consider trying another this year.
Another cardigowny type garment that I have been VERY pleased with that doesn't bobble in the slightest is from Celtic Sheepskin, a hooded camel's wool affair this bad boy - not el-cheapo but very durable, you will wear it for years, and the grey marl goes with anything. I've been out in this particularly during my shamless post-natal phase