Also, in the US it's quite common for commercial versions that look a lot like the striped dishcloth (although not like the Dalek!) to be sold in stores--they really do make good cleaning cloths and are certainly good for drying dishes. I wash the dishes themselves with a sponge.

Thrifty homemakers used to make dish towels out of old flour sacks--if you were really poor you'd use them for underwear or even dresses.