Every bicycle-repair book I've got tells me to put ferrules on the cable housing, and I have the parts to do it on the V-brakes I'm setting up. But, if I put one on the end of the casing that goes into the noodle, the outer sleeve of the noodle won't fit over the ferrule. If I leave the ferrule off, will the outer sleeve of the noodle be sufficient to keep the casing from splitting? Know what I mean?
I don't know what exact set-up you're working on, Kevin, but you usually don't need the ferrules at the noodles. The noodle end that the housing slips into is the ferrule essentially. So, it should work fine without the ferrules.
On other brake and derailleur systems the rule to follow is if the ferrule fits, you should use it. This is a little tricky, though, because sometimes a ferrule will fit on one end of the housing, the one that fits into the frame stop, yet on the other end of the housing (at the lever), it won't fit because the hole in the lever is just the right size for the housing only (a ferrule won't fit). So, what you have to do is try the ferrule each time and see if it will fit and use it when it does.
The idea behind the ferrule is to ensure that the cable housing can't pull through the frame stop or lever it's seated in under hard braking or shifting. It also reinforces the housing, which can make it last longer and prevent splitting and cracking over time. However, manufacturers sometimes design their frame stops and their components to a close tolerance so that you don't need to use the ferrules and the cable housing will still work perfectly fine.
Hope this helps!