I can't believe that I'm making my 2nd post on the site in this thread, but since I'm not overly shy and I've been doing this for a while, I guess I might as well!
I've never been particularly fussy about my toilet paper, so when I got the idea to try using cloth, I just went with some old clothes that were going to end up in the garbage anyway. I cut them into small squares, a few minutes work, and put a basket in the bathroom to hold clean ones. I've never figured out a good place to store a basket to hold the used ones, so just walk them to the bedroom and put them straight into the laundry hamper. I use the cloth tp for #1 only, so don't have to worry about rinsing or anything. I don't produce a lot of "whites/bleach load" laundry, so the cloth tp helps me get closer to a full load with no significant additional use of resources, especially as I hang to dry most of the time. One problem I've found with using unhemmed cloth of various types is the edges on some material frays and tangles in the machine, so sometimes I have to pull apart a big bunch of tangled cloths and trim off a bunch of loose threads. Pros and cons of various types of cloth: t-shirt type material doesn't fray, but it's rougher and tends to roll up a bit, whereas old worn out flannel pajama pant material makes lovely soft tp but frays a lot!