Hi blueheron
Here are patterns already done for you. Just click on the letters you need.

Here is a link that might be useful: dishcloth initials

That is really neat. But, how would I reduce the size of the initials to get 2 on a cloth?

Or, failing that, how could I make a basketball and hoop dishcloth?

Here is some knitter's graph paper. Perhaps you could print this out and then draw in the initials you need. There are alot of free alphabets for cross stitch that you can find online that might be useful too.
Hope this helps.

Here is a link that might be useful: knitter's graph paper

Thanks so much. I printed the graph paper and now I will attempt to make the pattern. (I also saved the file on my desktop for future reference!)

This is pretty neat, I wonder if there's one for crochet?