We use cloth napkins every day! Lol, people always come over and say "Where's a napkin?" or "Where are the paper towels?" when I say we just use the cloth ones, there in a stack on a bowl on the table, they always say "Isn't that a lot of work?" Lol
We just toss them in with the laundry- it is good to build up a 'store' of them- depending on what you eat, sometimes we go through them pretty fast! If it is just the 3 of us, family dinner, we will reuse the napkins for the week, unless any of them are really gunky or have food on them. I always have a fresh one for guests.
I honestly don't care if one gets a little stained- they are for wiping off food after all! Many come with patterns that are cute and will hide stains if that really worries you.
You can get cloth napkins pretty reasonably at Cost Plus Work Market or at Target. I have them from old and beat up, to some really nice new 'fancy' ones we use when company is over. But I made a decision to USE all my linens- it seems so silly to have something and keep it just for 'company' because its too 'nice' to use!
Try Cost Plus and Target- also keep an eye open at Crate and Barrel- they have great linens and they go on sale at the end of each season. I've picked up some nice napkins there at a cheap price.
Drop the paper napkins!I bet you will never go back :)