We wash ours at 60 and then tumble dry, to improve the absorbency and also so it shrinks as much as it's going to (we occasionally have to put it in the tumble drier when cleaning it, especially in winter, and found that it shrunk then, rather than during washing and hanging on the line)
We've also cut ours to fit the size and shape of the cage, sewing 2 blankets together, and have also sewed velcro around the edge so we can velcro it to the cage- we have 1 guinea pig who is a pro at finding gaps to wriggle through so she ends up on the nappies underneath- velcro will obviously stop that problem!
On an almost related note, we find that the corners they wee in go white and hard, we found that soaking those areas in white vinegar gets rid of that. Don't know if anyone else has had the same problem, but thought I'd mention it.