I started using cloth pads almost (ack!) 20 years ago when I was just setting out on my "green" path. Back then they were a little bulky and awkward, and had scratchy velcro closures, but the ones that are out there now are much nicer and more compact (and there's no thigh-chafing velcro!). I've got a set of these super cute ones stashed away for my daughter when the time comes.
Washing them is no big deal. If you've ever used clothed diapers with your kids the system is the same - just keep a small container under the sink with a bit of water and some soap, borax, or oxygen bleach, and line it with a mesh bag for easy removal on laundry day. Be sure to wash them in cold water so the stains don't set. Treat them well and they'll stay looking new for years. My one recommendation would be to get the ones that have some kind of closure to hold them in place - it's really annoying to lose one down the toilet because you're not paying attention.
But what about when it's summer and you want to go swimming? Well, that's where my favorite thing comes in. I used to buy expensive organic cotton tampons for those occasions when a pad wouldn't do (did you know that cotton is the most heavily pesticide sprayed crop, and that when you use conventional tampons you're putting it in the most absorbent part of your body?), but then about 11 years ago I discovered The Keeper. It consists of a latex cup that you wear much like a tampon (similar to those disposable cups they came out with several years ago, but much better). When inserted properly, it creates a seal that keeps it from leaking, and you can go for up to 12 hours between changes.
When it came time to replace my Keeper (they last for about 10 years before the latex starts to degrade), I decided to try out the Diva Cup, which is basically the same idea as the Keeper, but is made of silicone and can be boiled occasionally to sterilize it (the Keeper people are also making a silicone version now called the Moon cup). I sometimes find the Diva Cup a little harder to position than my previous cup (maybe the silicone is a little stiffer than the latex?), but it looks nicer and does a fine job. These things probably sound a little out there if you've never thought of using anything other than the conventional disposable jobbies, but they really aren't. I was stunned to discover while having coffee with a group of friends a few months ago that 4 out of the 5 of us are die-hard users of reusable menstrual cups, and not one of us is named Leaf or Rainbow. ;D
I can honestly say that I would never go back to disposable menstrual products. These are easier to use and more convenient, you can save yourself hundreds of dollars, and just think of all of the pesticides, plastic and paper that won't be used on your behalf.
Lunapads is an excellent source for really nice pads and Diva Cups, and the pads are made right here in Vancouver.