Felts and leathers that need to be changed periodically are in the action, keyboard, damper mechanism, pedals, and on the plate under the strings. They should be replaced not only because they wear out, but because they lose their resilience. With unresilient felts and leathers, the mechanism is noisy and feels loose.
Leather is supplied in various grades, densities, and thicknesses. Most commonly used in piano actions is buckskin. Some manufacturers use leather for key bushings because it resists wear better than felt.
Felt or leather that is relatively thin can be cut with sharp scissors. Thick felt and leather, regardless of the density, is difficult to cut because slicing through it leaves an uneven edge.
Replacing felts and leathers on action parts is a tedious, time-consuming job that is justified only when replacement parts are not available, or in pianos that deserve a conservation-minded approach. In pianos, fortunately, the joints between felts and metal parts do not need to be very strong, hence the usage of hot-melt or PVC-E glue is a common option of usage for glueing purposes.
Quality replacement parts are available for most modern pianos, and their cost is moderate when compared to the time needed to rebuild old parts. In most cases it is even worth modifying action rails to fit slightly different new parts rather than rebuilding the old ones.
Replacing worn felts in vertical pianos is a reasonable option if new parts are too expensive.