For the clothesline mug rugs you just use a regular large 90/14 needle. This idea can be found in the book, "It's a Wrap" by Susan Breier. It is well worth getting the book. She also has another book called "It's A Wrap II" that has even more wonderful ideas.
It basically is just wrapping narrow strips of fabric around clothesline rope and sewing it in a circle with your sewing machine. The book has all kinds of tips and ideas.