I use Costco microfiber towels for my wheels, but don't trust them to my paint. I believe there's very different quality levels of microfiber, and am skeptical of the cheap Costco ones. I'm still in search of the perfect one, but found a great waffle weave blue microfiber towel I use to dry the car (
http://www.properautocare.com/bigbludryint.html). For buffing, I use this one:
http://www.properautocare.com/vipeshmibucl.html. Washing is done with a microfiber wash mit from that same place.