Thanks to Sujata for this Frugal Baby Tip!
Because of discussion on this list, I recently did was buy a set of 1 dozen terry shop towels from Home Depot for $6 US. They are a good size for diapering, but the texture is not soft so I am prewashing them a few times. I figure that if worst comes to worst, I can use them as a diaper doubler or a burp cloth or bib or baby towel. At that price, it is hard to complain.