To me a terry towel is another term for an all purpose towel or for general cleaning. A MF terry is just an all purpose MF towel. Some can be paint safe but not all are. Read the descriptions carefully and buy from a respectable source. Personally I would not use Walmart towels for paint. From what I remember seeing in the store they are 85/15 blend (very low polyamide content) and the borders were horrible and already falling apart in the new package. Costco MF towels in comparison are much better and cheaper and at least paint safe when new. They get pretty rough after a few washes but at $0.40/towel you can't go wrong there. If you want real detailing towels go with towels Autopia sells, TRC, and MF Tech. GG towels look very well made but IMHO not worth the price. True MF towels can be used for a long time but eventually they do need to be retired eventually. Spending $20 for 3 towels can get pricey down the line and probably financially not feasible for professionals who use hundreds of towels.
Yes, terry cloth towels are used for general purpose by most people. What makes terry special though is how it's woven. The looped strands actually increase absorbency and (I've seen this debated) the aggressiveness of the cloth.
Microfiber is special because of the split fibers. That, combined with the electrostatic charge and the softness of microfiber, are what causes the towel to pull things off the surface and hold it in the knap of the towel, away from the paint. Obviously, not all towels are split. These include some glass towels, lens cleaning type towels, and (to my knowledge) suede. Those are a different blend and work a bit differently.
So, here's what I don't get:
If the big portion of microfiber comes from splitting the ends of the weave and the major selling point of terry is that the fibers are looped, what is microfiber terry? Is it simply a soft terry weave that doesn't share the split fibers of a normal microfiber or some odd creation that somehow combines both the benefits of the split fibers of microfiber with the weave of a terry.
My personal opinion is that they are worth no more than a good terry towel. However, I have no idea exactly and can't seem to find too much information on the internet.
If anything I said is wrong, please correct me. If anyone has any light to shed on the situation, please let us know.