Here are my sewing instructions for homemade fabric napkins:
1) Cut fabric squares of 17" x 17"
 (or whatever size makes you happy).  This left me with some smaller pieces that I will make into snack napkins to use with tea, dessert, etc.
2) Iron in a 1/4" hem on all 4 sides, then another 1/4" hem to tuck in the raw edge.
3) 
Miter the corners.  You can also leave them square, but I have perfectionist tendencies so I mitered mine :)
4) Sew all the way around the edge.  Voila!

 Not only have I given life to this not so hip looking fabric, but these cloth napkins are going to save trees