There are many ways to swaddle a baby using a cotton muslin wrap.
Two popular methods are the standard swaddle and the "Aussie" swaddle both of which can be seen demonstrated by Raegan Moya-Jones, CEO and founder of aden + anais, on a video clip from ParentsTV which you can find here.
Many of the ways to swaddle are also detailed in a book called Swaddle Love written by Raegan. Here you can listen to the introduction and chapter one.
And, of course, the wraps can be used as a multi-purpose blanket.