Jake said:My question though is how would you make the actual towel. Would it have a thickness and how would the gradient affect an object with thickness? I think it would only affect the outside surface of the towel.
Jake,
If the goal is only to duplicate as closely as possible the V-Ray render, then I don't think there is a need to put a thickness on the towell since this will complicate the mesh. I had a close look at the original image and I don't think there is one there. To me, this just looks like 2 single planes attached together on 1 side slightly above the bar.
Beside this, the plane on the back, not being visible, is very likely a flat plane.
Therefore I would just subdiv/displace the front plane and later on add a second plane for the back (+move it slightly to make it visible on the lower right).
Of course, if you want a real towell so several renders can be made from various positions, then it's a different story.