I have always used a mitt, such as the pic a few posts up, and have never had a problem with scratching my paint. I machine wash and dry the mitt after each use to remove whatever dirt and dust and whatever else there is. I go through probably 4-5 mitts a year. I wash my cars (in summer time) at least twice a week, and in winter, once a week.
Secondly...and most importantly IMO...I NEVER use a towel to dry off the car(s)!! I use the garden leaf blower to blow it dry. It actually does a better job and removes 90% of water from all the nooks and crannies. I don't drive off and have water dripping from secret places to show that ever popular, "He just washed his car." look...
It is especially good on the front grilles of the 325 and the 528 as it removes all the water from all the little slats. I love it.
Get yourself a good 200mph garden blower. It is great fun too...your neighbors will love you when you wash your car early in the morning!!