Paper towels are extremely expensive. Several cents per sheet, in fact. Don't believe me? Peruse your local Wal-Mart and see the packs of rolls on sale for $20. They are also extremely not green. Many people use them for a small stain and toss them right in the garbage.
A much better alternative is to use rags. The key with them is reusability. Unlike a paper towel, after you soil a rag, just toss it in the laundry. If you have a large set of rags, you can run a load just for rags, or even toss them in with your regular laundry. While this does increase the cost from the ~75 cents you pay for the rag, it will pay off in green dividends and cash dividends if you wash the rag enough times.
Rags do not necessarily have to be purchased, and this is where the real savings both green and otherwise comes in. You already have a bunch of rags sitting in your closets somewhere, the fiber is just in the form of your old clothing. Old t-shirts (see above) make great rags, and repurposing your old clothes means you don't need to outlay any money for rags. Just grab your scissors and an old shirt or set of sheets and cut into rectangles. Soon you will have a big bucket of rags. Reach for them in any situation that you would need a paper towel.
Finally, if you must use paper towels, make sure to get maximum utility from them. Do not use a huge piece of towel for a miniature stain. Make sure to grab a small piece of towel and use it completely. If you are mopping something up, make sure to wring out the excess liquids and try to re-use. If you end up getting a paper towel not that dirty, you can recycle it.