Should these items become really popular, knitters could simplify their gift lists, stores would stock them, we could make real money selling them, the price of dishcloth cotton would rise, ...wait a minute. I think I'm happy with the way things are.
I'll just brighten my home and the homes of my friends with a hand-knitted hand towel or two:
I think slip stitch is my perferred pattern for these. I use Peaches & Creme and Sugar 'n Cream yarn interchangeably for them.
I like the ombre colorways well enough, but prefer mixing the colors to produce striped patterns. I knit them on size 7 needles, (I recommend plastic or wood needles to ease the strain of knitting cotton) to an finished size of approximately 15" x 22", which requires a cast on of about 64-72 stitches. I've used various patterns, including the famous ball-band dishcloth pattern, slipstitch patterns I've found on line, and have even bought knitting books just for one pattern to use for a dishcloth.
I don't mind going to extremes, because I think it is worth it for something that is used so much and lasts so long.
We use the towel I keep hanging in the kitchen everytime we wash our hands. That means many, many times during the day. I like to have at least two, so I can put one in the wash and pull out a fresh one whenever I like.
I know my fondness for these towels is catching on, because my friends have seen them and are telling me they would make good presents. Recently, one of our houseguests came out of our kitchen waving a ball band version and told his wife, who used to knit dishcloths, "You need to make these. They are wonderful!"
I've tried the nicer cottons, such as Mission Falls, with good results. This one is a placemat, but it would be a good towel as well. I've got a couple of hanks of Plymouth Fantasy Naturalle and some linen blend yarn that are destined to become handtowels or placemats.There's a lot of cotton yarn out there, and Christmas is coming. Knit a cotton hand towel, and impress your guests.
ETA: Since I wrote this, it has become the most read post on my blog. I know what everyone is looking for--a pattern. I've finally written one, just click here to see my pattern for a Gridded Dish Towel. It can be easily altered to make towels like the ones in this post.