I use basic kitchen cotton (Peaches and Cream, Bernat, whatever I can find) for my washcloths.
The kitchen towels I knit or crochet, to dry hands with, but I use bar rags for drying dishes.
Here are some Tunisian spa cloths I crocheted - this is essentially how I crochet dishcloths, too, except these are with a cotton/linen blend:
The dishcloths that I knit are just a basic pattern:
http://www.ravelry.com/patterns/libr...thers-favorite