I just built a porch swing out of cedar. very light weight and weather resistant. Somewhat prone to splitting/splintering during construction (for example, I had to take light cuts using a pattern router bit), and I was careful to select mostly knot free sections. Definitely kept some CA glue and accelerator around to fix small split outs and cracks that were inevitable.
There is a guy in SC who makes/made cypress outdoor furniture in the Adirondack style - i liked how it felt and may be nicer to work with than cedar. He had some source of industrial cut offs that I would love to find. I am sure there are other super spendy and rare exotics that you could use... There is a place in Asheville called Scroungers Paradise that has a lot of interesting exotic wood including some stuff that would be good for outdoor furniture if you are ever up this way. Good luck and I'd love to see the results.
Anyone else out there have ideas on appropriate finish for cedar outdoor furniture? something in the deck sealant category?