I use micro fiber towels.
They're great; better than any cotton towel i've seen.
I used it with Zaino, and it was perfect.
Zaino says to only use cotton towels made in the USA, but I think the microfiber towels are much softer/better.
Only problem I have is when they are brand new, I have to wash them before I use them due to the lint they leave behind.
Other than that....
Here's a great article on Microfiber towels. I use the Sonus Der Wunder Detailing, SOnus Der Wunder buffing and Sonus Der Wunder Ultimate drying towels. They are FANTASTIC!! Sonus Towels
Heres the article. Microfiber Article
You should use them for all aspects of detailing: polishing, buffing, drying etc..
Throw away your cotton/terry towels as there is no comparison, especially on a black car.
The only downside is that it can get expensive when using alot of them to do a complete detail. There is a large discrepancy in the quality available. The best deal I have seen on decent microfiber cloths was at Costco. If you want to go high end there is a company called PAKSHAK, very plush excellent quality. Remember to cut off the little white nylon tags as they can cause marring.
I bought a bunch of Microfiber towels from PakShak. They have gotta be about the best ones out there. They made the ones I bought at wal-mart turn into window cleaning towels.