I have a shaggymac rag but it seems to collect a lot of lint. So I'm using the powersupport one now. It came with the screen protector for the ipad. It's more of a silk like cloth.
And yes iKlear is good but Walmart sells a really good product for cleaning glasses called Wipe N' Clear..and before everyone goes all native on me saying it has alcohol in it, I have been using it for over 6 years on everything from iPods, iPads, Macbook Pros, iMacs, and iPhones and none of my screens have ever gotten messed up or their coating destroyed. One quick spray and a good microfiber cloth is all it takes.
It isn't at all noticeable with the display on, however I have a difficult time getting the screen totally clean of any smears that can be seen when the display is off, as look like brand new. This is using iKlear.