So what is the main difference between C fold Handtowels and Interfold, etc ?

The image shows the differences between how the three main types of handtowels are folded in their wrappers.  C Folds generally have the largest sheet size if they are opened to their fullest extent, however experience shows that many people do NOT actually open them up and end up drying their hands on their folded size (approx the size of a DL envelope). This means they may well reach for another, and another ....

If you have a wall-mounted dispenser the advantage of V fold and Z Folded Handtowels means that as one towel is pulled from the dispenser it pulls the next one to the dispenser aperture ready for use !

The interleaved nature means that they are far easier to pull from the dispenser individually and hence "hand fulls" are not pulled at once - as is common with C Folds !