There are several issues to consider when using the kitchen towel. One of the problems that most people have, is that they continually use a dirty towel. I have never completely understood why people continually use a dirty kitchen towel, or why it is even dirty in the first place (besides maybe accidently wiping up food or dirt with it). If your hands are clean and your dishes are clean, then the towel should remain clean after drying your hands or your dishes. If the towel is left to dry properly, after doing its job of drying other things, then it should not grow mold or mildew. After a little while, it will need to be changed out as it will gradually collect oils from your hands and pans and stuff from the kitchen, despite your best efforts to let everything that touches it be clean.
It is important to monitor the kitchen towel, especially if you have unobservant roommates or family members, as they may have inadvertently wiped up chicken blood, or, perhaps, maybe coffee was spilled on the counter and the towel was set in it and then placed right back on the handle without anyone noticing.
Some people like to have two towels in the kitchen, one towel to use for hand drying, and one towel to use for drying dishes. I think the two towel method is useful for maintaining a cleaner towel for longer periods, although, while you may be able to stretch the usefulness of the clean towels, you now have the extra work of watching, swtiching out, and washing two towels as opposed to one. I like having two towels in the kitchen just so I can use one to snap people in the bum, but that’s just me. Towel snap!
So, as you should have been able to glean, the most important thing for excellent use of the kitchen towel is keeping it clean. The second most important thing is to allow it to dry properly in between uses. Sure, sure you will have times when you need a towel to clean up a dirty mess, but then that towel will go straight to the wash and will not be a regular customer of your hands or dishes for the next week.
If you fail to clean your towel or allow it to dry properly, it will develop a a terrible smell that will haunt you in your dreams. The smell will overtake your every thought and permanently bind you to its will. You will never again escape its clutches. It will be the farthest thing from the most interesting smell in the world, and yet, everyday you will think you smell the smell, even when you do not.