We have such manky handtowels at home here, the other day I decided to jolly some up a bit. I got an old (not too ugly) towel, a tea towel and a doilley. I cut the towel in half (to make two hand towels) and made some binding.
Press the strip in half lengthwise.
Open it up and press each raw edge to the centre
Fold the binding up, it's ready to use.
This is the most useful tip ever. I can't remember where I first saw it, but my goodness I have used it so many times since.