What kind of rags to clean drivetrain?
Whatever you have to hand.  Generally chains are filthy, so I use cloth rags whose next stop is the bin.  I don't wash rags for reuse - by the time they're down to cleaning chains, they're pretty dirty already.

I do use a clean paper towel for the last wipe of excess lube.

I've never bought rags in my life.  I simply recycle old towels and clothes.  



Great


Towels/towelling 
Cotton 
Calico  
Corduroy  
Cheesecloth / muslin  
Linen         
Paper towels
Velour    
Natural fibres are generally pretty good for cleaning.


Adequate


Polyester 
nylon   tends to repel water, and be quite thin
Lycra   
sacking / burlap     tends to be quite thick and somewhat scratchy.
Wet Wipes


Poor


Fur     - drops fibres like wool
wool    - tends to be dropping little fibres when its old and worn down.  Better to compost pure wool, or unpick it to a string (see below)
lace    - too many holes
silk     - too thin
leather   - not very absorbent.  Reuse in other ways instead.
Tissues / toilet paper      - can't handle the water and break down quickly.
Sailcloth    TOo hard and not absorbent.  Better reuse elseways.
PVC and other waterproof layers - not absorbent
Most artificial fibres are poor for absorbing.


Yarn / wool - has use as a "gear floss" for getting dirt out of your cassette between the cogs, but is less useful elsewhere.

Feel free to raise comments with corrections, or just edit directly.