Dedicated cosies are easy to make cheaply and much more efficient. A good cosy will ensure the food keeps hot while rehydrating and means you can eat your food, hot, without the need to re-heat it.
To explain their use it's probably worth covering the rest of my cook kit beforehand:
I carry an MSR kettle, a meths coke can stove and a caldera cone which doubles as a wind-shield and pot stand.
I aim to only boil water in my kettle, you can use them as a pot and even eat from them but that will involve dirtying the kettle and require washing up - both things to be avoided IMO.
I boil a kettle of water, use about a third to rehydrate my meal and use the rest for a brew which I enjoy while my food is rehydrating.
You can make cosies out of any insulating material but lightness and durability are the key factors. Some people cut up closed-cell foam mats (EG a 'karrimat') and use that but I find that material stiff and actually quite heavy for the insulation it provides.
The best material is 'Thermawrap' which is a sandwich of 2 layers of foil with a layer of 'bubblewrap' in between (http://thermawrap.co.uk/loft_wrap.html). It's a fantastic insulator, lightweight, can be cut with household scissors, and is flexible enough to be used to make any cosy shape. You can buy this in small quantities from specialist backpacking on-line stores such as Backpackinglight ( http://www.backpackinglight.co.uk/product212.asp ) this is enough for 2/3 cosies but it an expensive source for a relatively small piece.
Thermawrap, or an own-label equivalent, can be picked up from DIY stores and at the start and end of the 'insulating season' it's often half-price for a big roll (7.5mtr x 600mm). I paid £14.99 for a roll of the B&Q own-brand version of the same size and one roll is more than enough for all feasible cosy needs. If you and a mate split a roll you'll get masses at not much more than the price the specialists charge.
There are basically two styles of cosy; Pot cosies and 'Envelope' cosies.
These are a bit more work and personally I don't cook in / eat from my pot but the cosy is useful for keeping a drink warm while you drink it.
(Pot cosy for my MSR kettle, I rarely use the lid. If I was using this to rehydrate food in I'd make a flap to cover the bit behind the handles - a lot of heat is lost through this gap. Note the sidewall cut below the kettle lip and the deep lid cosy to keep the heat in)
Cut one circle of 'Thermawrap' the size of the bottom or your pot, one circle just larger than the lid.
Cut a strip of 'Themawrap' as long as the circumference of your pot & deep enough to cover the wall of your pot (I cut mine to below the lip of the pot to prevent dribbles when drinking from it).
Construct a 'dish' of thermawrap using 'duct tape' to join the pieces together, cutting a slot in the wall to allow the handles to stick through (trying to juggle a pot of hot food or drink holding only onto the rim is not recommended)
Construct a shallower 'dish' for the lid cosy which will fit over the base cosy giving all-round insulation.
A close-fitting cosy will keep food / drink hot in a titanium pot for upto 20 minutes - enough time to rehydrate. Without a cosy drinks or food can be tepid within minutes, both aluminium and titanium are fantastic conductors so heat is quickly lost.
These are easier to make and in my opinion more useful and efficient for rehydrating food.
I use two types: A small cosy and a larger one which seals with 'velcro'
Small cosy which is used to protect the hands when handling the food / hot water mixture and provides stability / retains heat while you eat your food from the bag. Basically it's a open-ended envelope or pocket about 2/3 of the height of your zip-lock bag. Place the bag of dehydrated food in the cosy folding the open end of the zip-lock bag over edge of the cosy so you can pour the boiling water into the zip-lock bag - not into the cosy / over your hand.
Seal the bag, expelling any trapped air, shake the contents to ensure they're well-mixed, tuck the end of the zip-lock down into the the cosy and place the cosy and zip-lock into the larger cosy.
When the food is rehydrated remove bag and cosy from the large cosy and holding the small cosy eat your food straight from the bag.
Large cosy - this is a proper envelope just slightly bigger than your zip-lock bags.
Measure a piece of Thermawrap that's 2.5 times the depth of your bag and about 2 cm wider on each side. Fold once so it's almost as deep as your bag. Trim the 'front' so it's just a smidgen wider than your bag, leaving the 'back' 2cm wider on each side. Fold the extra width of the 'back' over the 'front' and seal with duct tape (this ensures insulated seams).
Trim the extra top flap to the width of the finished envelope, round off the corners and fold it down over the envelope to make a flap. A piece of self-adhesive 'velcro' on both surfaces will ensure it stays closed and prevent heat escaping.
(Food in small cosy, small cosy - the right way up!, in the large cosy which is then sealed with the velcro tabs)
Using these two cosies together food will stay hot for over 30 minutes, more than enough time to rehydrate any meal, plus having two always gives you the option to prepare a pudding or starter if you're greedy / posh.