Amazing how many people are having trouble getting their towels and nappies soft if, like me, there is no possibility of getting a tumble dryer and you are trying to obey the "no fabric conditioner" rule. After trying everything recommended by MN and the internet in general: white vinegar, no detergent, comfort pearls, blah blah blah, I have finally found something that makes a difference. I have to line dry my stuff.
I have just bought a set of hard rubber reusable balls from a bio co-op. You put them in the drum with your washing plus your eco friendly detergent and they beat the living daylights out of your towels/nappies. They loosen all the fibres, so even if line-drying they come out fairly soft - maybe not as soft as with a tumble dryer and conditioner, but not bad all the same.
For the nappies, I sit down in front of the TV when the kids are in bed, and rub them together which gets them softer still. Then insert liners, fold and put away - and ready to go for the next day.
The rubber balls are specifically made for the purpose and were quite dear, but apparently golf balls also do the trick. The only downside is that they make quite a noise in the machine, not good if you're trying to benefit from night time tarifs!
Believe me, it helps.