A cardboard box with the side cut down works just fine. Lining it with paper that she can shred is better than towels or blankets--easier to clean up and the babies' little claws don't get caught in it. Of course, it doesn't matter how many nice nesting boxes you set up. She's going to choose her own spot anyway.
I had several nice nesting places set up for Goldy. So what did she do? Went into the smallest cat carrier (very tight fit), pushed the blanket out of it, and had her babies on the bare plastic.
I moved them to a laundry basket as soon as I was sure she was through having kittens.