If you hitch hike the length and breadth of the Galaxy and still know where your towel is, then the person giving the lift will automatically asume that you will also be in posession of other necesssities and will more willingly lend/give the hitchhiker other things.
many uses, but... the the only real use explained in the book is that prior to going into hyperspace, fold the towel into a triange and grip between your heels. Then when the hyperspace jump is complete the towel will have move and you can work out how far you have gone.
No, the best use described in the books is to confuse the Ravenous Bugblatter Beast of Traal, an immensely stupid (but ravenous) animal that belives that if you can't see it, it can't see you, so when in the vicinity simply put the towel over your head....