This is an ordinary pattern using self striping yarn
I knitted a cloth up with magicline self striping yarn. It looks good. :)
Granny cloth with 2 different yarns...
I then knitted a diagonal cloth with 2 different yarns. One magicline self striping yarn and one plain DK cotton yarn. To keep the square shape and the uniformity of the pattern I used the below pattern:
Row 1: Knit both colours together
Row 2: Knit with just magicline
Row 3: Knit with just magicline
Row 4: Knit both colours together
Row 5: Knit with just plain cotton yarn
Row 6: Knit with just plain cotton yarn
Use these 6 rows and repeat until the cloth is finished.
I used this pattern which is widely available on the internet:
CO 3 sts
Increase Row: K1, yo (in the opposite direction – this prevents a hole when knit), Knit to the end of the row.
Repeat the Increase row until reaching a total of 43 sts. Knit 1 row even.
Decrease Row: K1, K2tog, Knit to the end of the row.
Repeat the Decrease row until reaching a total of 3 sts. BO all sts.
You can find a printable version of this pattern here: Free Dishcloth Patterns from sew-funky.blogspot.com.