Tim Ferriss, of 4 Hour Work Week fame, wrote a great post last week on how to travel the world on less than 10 pounds. Of course after watching the video and reading his packing list, I had to investigate.
One of the necessary items on his list was an MSR Packtowl. After hearing Tim rave about it, I went to REI and bought one. I've used it everyday since and I'm very impressed. The Packtowl absorbs water more efficiently and dries faster than a normal towel and since it's so small and light, I can wash more clothes and do fewer loads of laundry. I have to do a load just of towels every week!
I would encourage you to test drive one and lemme know what you think.