I've used a Therma Flec Heat Resistant Cloth sales for around $8 a yard but you get lots of pot holders, mits & pads from it. Comes in quilted & non quilted and a couple different colors. Here's a link to a supplier:
http://www.beaconfabric.com/vindex.html?cat210.htm
I've also filled some of mine with cotton batting and use kitty litter that I put a few drops of scented oils such as cinnamon, apple, lavender, etc and made them to be used as hot pads. When you place a hot dish on them the aroma fills the room. PPl loved them as gifts!