Basically, cotton is durable, absorbant, and (for the most part) cheap. You can machine wash and dry cotton, you can't machine wash wool.
For washcloths, the most affordable, easiest to find cotton is Peaches and Cream or Sugar and Cream. You can even find it at Michaels, Joanns, and yes, Walmart.
Baby Bunny Blanket
Feather and Fan lace scarf