There are now loads of people offering alternatives to paper towels on Etsy. They are made out of many different fabrics and can add a nice touch to your kitchen. They also make a nice house-warming gift for that frugal friend. I had a stack of squares of flannel leftover from more than a few projects and deciding it was time to hem the squares and share my process.
Polyarn from Superior for the top looper to make a smooth rolled-hem. Check with your manual to set up your machine. I practiced with a few scraps to get the hem I liked the best. You may like a wider hem that covers more of the edge. Do what makes you happy.
You can find my tutorial for cloth napkins in the side bar or here.