yeah I keep every bolt of cloth I salvage because every type of armor for my E/Mo requires bolts of cloth. Up to 75 pieces of cloth for one armor piece right now at Droknar's Forge plus 12 or so pieces of other materials like linen, shells and so forth depending on the type I am trying to craft.
At one point I had 510 Bolts of Cloth, I sell packs of them for 8g per piece, can be easy money - not huge amounts of it, but it helps. Same goes with Iron Ingots and Tanned Hide Squares.
You use them to craft Monk and Elementalist armours. Fortunatly for my Monk and Elementalist, they seem to be more common than any other "common" crafting material.