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There's a significant difference. The difference typically lies in the "plushness" of the towels, aka: threads per square inch. The higher the thread count, the softer the towel.
I've also noted a high degree of linting with the cheaper towels, and no linting with the higher quality towels. That's not to say that the Wal-Mart/K-Mart towels cannot serve a purpose; I like to use them on the seats, rims, dash, door panels, seat backs, etc. They just don't get used on the paint.
My source for high quality microfiber is http://www.PakShak.com Excellent customer service and attention to detail. Join the Autopia.org detailing site, and you can purchase the towels at a special Autopia member discount of $2.25 per towel. :)
:iagree: If you are using microfiber I would also recommend the Viper brand and the ones available from tascar. For cotton ones KLO, who is on this board makes great charismas.