So far all 3 of you readers chose cloth napkins with a resounding yes. I voted too, but I'm not counting myself :)
That's cool because it brings me to my next idea, which is to make branded cloth napkins (screenprinted with my diner's logo) to use and possibly sell (if the logo is pretty enough...which it totally will be).
Also... I've added a new restaurant to visit to the list:
Flow in Jim Thorpe.

I've actually wanted to check this place out for a while, my coworker Pam's son opened it a few years ago but has since withdrawn involvement.
Kevin and his wife Sara are farmers and bakers who sell their wares at the local Emmaus Farmers Market (which I'm embarrassed to say I have never been to!). They even have a
blog! Pam offered to introduce me to them at one of their wednesday evening CSA potlucks, so I'll probably be going with her in 2 weeks. I'm really excited to meet this couple since it seems like we are interested in some similar pursuits, and I'd love to see how their whole operation runs. P.S.- visit their site, their bread looks amazing! Worth a Sunday afternoon trip to Emmaus in my book.
I just checked out the menus for Flow and since their are some great trails nearby, I think it'll make a fun day trip for an upcoming weekend. I'll see if I can rope some people into going with me and report back.