If you're using this stuff, you really should use a microfiber rag, not terry cloth. You can pick up bundled microfibers at sams club for pretty cheap. I'll never buff or take wax off my car with another terrycloth rag. They are a little too harsh. You can also find old baby diapers that are incredibly soft to use, but they are more expensive. If you want to read about detailing and get some great tips try this site:
Autopia - Autopia Home It's a great forum and the detailing guide that is posted there is a great reference for products to use. I generally use Meguires Gold Class products for everything on my vehicles. It's a bit more pricey, but it works. If you want to go a more professional route try out some products from here:
Top of the Line Auto Detailing Supplies I have ordered plenty from there as well with excellent results, however I'm usually too impatient to wait for delivery, hence the Meguires.