Don't be upset!
I think it's great you want to support your friends at a critical time in their lives.
As far as yarn: for a dishcloth I'd suggest cotton, either Sugar 'N Cream or Lion Kitchen Cotton, whatever is easiest or cheapest to find in your area. I've also heard people having good dishcloth experiences with Lion Microspun, but I think you need to hold it doubled to get a good weight.
For needle size I'd probably start with US size 6 or 7. With Sugar 'N Cream I usually use US 8s, but in Illusion Knitting it is usually better to size down a needle size or two for a better finished effect.
And you didn't miss the yarn and needle info in the pattern - it isn't there.
Good luck on your projects and let's see a picture when they're done!