Those hooded baby towels are very cute but almost worthless because they are so thin and not absorbent. I've made hooded towels for my kids and they work great. They are also great baby shower gifts. It is also a project you can do with beach towels for the summer pool outings. This project really only takes 10 minutes or less.
You will need:
1 bath towel
1 hand towel
Cut the hand towel to a length of 11 inches. One hand towel is usually long enough that you can use the other end on another bath towel.
Fold the hand towel right sides together. Trim the corner to make it rounded off. Pin and sew the raw edges with a straight stitch. Zigzag the edges to prevent fraying (or if you have a serger just use that instead).
Find the middle of the bath towel and mark it with a pin. Find the middle of the hood and pin the middle of the hood to the middle of the bath towel, matching up the finished edges. Pin the rest of the hood onto the bath towel. Straight stitch the hood onto the towel. Voila! Finished.