Have you seen this stuff? It's iron-on vinyl! Yes, you read that right... iron-on vinyl. Basically, you can take any fabric (particularly cottons) (of which I have a lot) and make it into awesome water-proof vinyl.
I bought it at Mendel's, which is a small-but-funky fabric and craft shop in San Francisco. When you come to visit some day, we will definitely have to go there.
Check it out... here's a little test swatch I made:
Can't really see it too well there, but the left half is regular cotton and the right half is vinyl. Here's a better angle shot showing the shiny, shiny goodness:
I have revised my tote bag plans considerably since that post. I am now using canvas and cotton for the exterior. The interior will contain toiletries (including recently used towels), so I am going to use iron-on vinyl on the cotton lining. Yeah!
Now I just need to finish it!