i know one lady who makes pot holder and she uses old terry towels she cuts up and folds for the center. they work great, hold up to many many washings and i never burn my fingers using one she made. lots of people just use warm & natural, a couple layers, some people use a third layer of fabric, maybe flannel then the batting...and some go buy the special stuff. it is certainly your choice what you use. just be careful not to use any polyester, batting or fabric blends; they can melt when they get too hot.
i am no good at making potholders and have given up...mine always burn your fingers and i even tried the insulbrite stuff...so i gave up making them i admire anyone who can make a cool potholder.