Zaino recommends 100% cotton Fieldcrest towels, as someone said earlier in the thread. Of course, using a 100% cotton towel is a must. But, beware of labels that say 100% cotton (even on Fieldcrest) because the binding thread along the edges may not be cotton even though the label says 100% cotton and does not mention anything about the binding.
I bought a load of Fieldcrest towels (bath, hand, washcloths) for my car a while back. All labels said 100% cotton (I checked each piece before cutting the lablels out), but after using 'em for a while I felt something stiff in one of the washcloths. Sure enough, a burn test revealed that the binding thread was polyester. (By the way, the bath and hand towles had cotton binding thread. Go figure.) Boy was I pissed. I have a few marks in the paint that you can see if you look closely in just the right light and at just the right angle...I bet the washcloth caused 'em.
Anyway, always do a burn test to a small piece whenever you buy new towels...regardless what the label says and regardless what you paid for 'em or who made 'em.
Also, as someone said, don't use fabric softener or bleach. Those products leave a residue that you can't see or feel, but that will leave streaks in the paint and, especially, the windows.
For years (ever since I've been cleaning cars as a labor of love, instead of a chore), I've always dreaded the part of the endeavor involving the windows. I'd spend what seemed like hours, I'd wipe until my arm was sore, I use two clean towels per window - the first to get it clean, then the second to try to eliminate the streaks - I tried every window cleaning product made. Yet, I could never totally eliminate the damned streaks.
Then Sal Zaino told me not to use bleach or fabric softener on my car towels. I ignored the advice and continued to futilely battle the window streaks. Don't know why I didn't believe him...total brain fade, I guess. Anyway, I was talking to the customer service department of a window cleaning product and the rep also told me about the bleach/softener problem.
Well, what the hell, I figured. Now that two differenct sources told me about the problem, I might as well see if there was anything to it. I re-washed some towels without bleach or softener and then cleaned my windows. Well, it was the next thing to a religious experience! The windows came out streak free with very little effort.
I can't believe I beat myself up all these years trying in vain to get my windows streak free. And I really can't believe that I ignored Sal's advice for so long. What a doofus I was on that point. How embarassing.
Anyway, if you are using rags that have been bleached or fabric softened, your windows have streaks in them. If you don't think so, you are wrong. Clean your windshield, point the car into the sun and you'll see 'em. Guaranteed.
I've never noticed streaks in the paint from rags treated with bleach and fabric softener, but I'll bet they are there. Of course, next time I wax my car I will use untreated towels. I bet life gets better.