VeganCowSilverSixpence I have used sleeping bag liners in the following circumstances: - keeping a sleeping bag clean. A liner is a lot easier to wash. - hygiene when hiring a sleeping bag e.g. when trekking - when a compulsory requirement in mountain huts/hostels abroad. If they provide blankets, you must provide a liner. Or you can not use their blankets and take a sleeping bag, but a liner is lighter to carry. - with a sleeping bag to add warmth - on its own when it is too hot for a sleeping bag but you want something to cover you as jamaisjedors said
If you have the budget go for a pure silk - rab do a good one. Very light weight, very small pack size. Downside of silk is that they are quite delicate and need hand washed - dh put his in the machine and ruined it.
I would generally recommend (and have) a poly cotton one as a compromise. Not as heavy as cotton and quicker drying, medium pack size, can be machine washed. Trekmates do a range stocked widely.
I have a Decathlon one, used it twice, it's very nice and soft and packs down really tiny which a cotton one would not and I imagine it would be super quick to dry if I washed it . It gives me an extra layer but takes up hardly any space, it also has a sort of built in pillow case which is great for holding the pillow in place.