I chose Lily Sugar N Cream Scents (the Aloe Vera), but any 100% cotton that gets gauge would work. Also, please not that yardage is approximate; I used one full skein of the Scents as well as part of a second one. I put a rubber band around the second skein to keep my measurements consistent, but I wasn't precise about the inches so there were times I measured 15 inches past a full yard and rounded it up to half a yard.
Seed Stitch Hand Towel
Yarn: Lily Sugar N Cream
Yards: Approximately 135 yards
Needle: Size 7
Gauge: 16 sts and 32 rows in st st = 4"
Measurements: 9.5" by 16"
Cast on 38 stitches.
Row 1 (right side): K1, P1 across.
Row 2: P1, K1 across.
Repeat rows 1 & 2 until piece measures 2" from cast-on edge.
Row 3: (optional) Knit across
Row 4: (optional) Purl across
Row 5: (optional) Knit across
Row 6: (optional) Purl across
Note: These four rows create the thin stockinette "dip" in the towel. It's purely aesthetic so you can choose to ignore this section and work the entire towel in seed stitch.
Row 8: K1, P1 across.
Row 9: P1, K1 across.
Repeat rows 8 & 9 until piece measures 13.5" from cast-on edge, ending with a wrong side row.
Row 10: (optional) Knit across
Row 11: (optional) Purl across
Row 12: (optional) Knit across
Row 13: (optional) Purl across
Row 14: K1, P1 across.
Row 15: P1, K1 across.
Repeat rows 14 & 15 until work measures 2" from the stockinette "dip" in the towel.
Cast off loosely.
Close up shown below: