Joshua discovered ideal burp cloths in the automotive section:
Our son, now two months old, goes through an inordinate number of small towels. Between burping and spitting up, breast milk misfires, and daddy knocking things over at 2AM, it seems we are always wiping things off our baby, or wiping thing up near our baby. We got some really nice designer burp cloths as shower gifts, but we needed a lot more, and they are expensive!
As a cheaper alternative, we headed over to the automotive section of our local mega-mart. There we found microfiber towels in bundles of 12 for $3. They are labeled as factory seconds, but they still look fine. The towels are super-absorbent and super-soft, and at 25-cents apiece, we can afford to have stashes of them in the nursery, the car, the diaper bag, etc.