Towel

• To absorb liquids
  
• As a sling in an emergency
  
• Wet, to dampen out homing signals in your head (TotalRecall?)
  
• As a nappy
  
• Cut and tied to make a rope
  
• As a mat
  
• Rolled into a tube as a pillow
  
• Rolled into a tube as a funnel for solids
  
• As a flag
  
• As a smoke blanket (for signalling)
  
• As a fuel
  
• With water, frozen, as building material
  
• As very weak clothing /armour
  
• Blanket
  
• Toga
  
• A sheet
  
• A prop for the small of one's back to avoid back trouble
  
• A covering to soften a chair to make it more confortable to sit on
  
• As an insulator to keep heat in
  

AC having used a towel for the three uses listed above in the past week...

• As muslin
  
• To cover heads in a religious sense
  
• To make clothing
  
• To block out the light
  
• To grab hot things without burning
  
• For Magic tricks
  
• Cut up, soaked, frozen, marked as playing pieces.
  
• Origami
  
• Cut, scrunched Earmuffs
  
• Strips as hair ties
  
• Something to dye or paint interesting colours/patterns
  
• Fashion statement
  
• Mouse pad (well, for an optical mouse, at least)
  
• Means of transporting sand from beach to home
  
• As a parachute in those marginal could-just-be-enough-to-stop-me-killing-myself situations
  
• To suffocate whoever made that last suggestion in their sleep
  
• To distract an onrushing bull - having dyed it with whatever red liquid came to hand first
  

Unnecessary - it's the motion rather than the colour which grab's the bull's attention.

• As a cape, for the style of fencing which requires one
  
• To wrap rising bread (it changes the texture of the crust, allegedly).
  
• Lining a computer case to muffle noise levels (or the bottom of one's shoes, to muffle footsteps)
  
• As a whip
  
• Packing for fragile objects
  
• Tie knots in it to remind you of things
  
• Decoration for an otherwise bare wall
  
• To identify a location