Why does a wet towel become more hot than a dry one? I remember a long time ago my mum had told me not to use a wet tea towel when taking food out of the oven because you can burn your hands - lo and behold, it came time to make dinner and I did not head my mother's warning from all them years ago and my hand got burned. Why does a wet tea towel heat up more quickly when removing items from the oven?
Is it because the water molecules are more excited when heated? 
 A: Water has a high heat capacity and is also a pretty good conductor of heat.
The dry towel has a lot of air pockets and doesn't have a lot of heat capacity in general.
Essentially you're bridging the air gap that was acting as an insulator.  The water also provides a sink for the energy instead of just going into the air.  That sink then feeds into your hand.  The liquid will also increase the surface area of contact with your hand and the hot object.
Just to clarify a bit on the title question: the term "more hot" may be confusing.  The wet towel doesn't have to be a higher temperature than the dry towel (it probably still will be).  It just has to transfer the heat into your hand faster (which is still a definition of "more hot" some people just may take that as temperature).  
A: Missing from the currently-accepted answer is the importance of steam.
If you use a damp towel to grab a heavy metal dish out of an oven at $\rm 350^\circ F = 180^\circ C$, the heat from the pan will enter the water in the towel much more rapidly than conduction can carry it to your hand.  Instead some of the water in contact with the hot pan will instantly convert to steam, which is much more mobile than the water and (because of the pressure change involved in the vaporization) can move through any remaining air gaps in the towel very rapidly. When the steam reaches your cool hand it is very efficient at transferring the heat to you.  Furthermore this rapid vaporization is the most dramatic in the parts of the damp towel that are held the most tightly to the hot pan --- which is exactly where your hand is.
Using a dry tea towel to grab a hot pan puts the heat into the towel fibers, which are poor conductors of heat, and which serve to separate your hand from the hot pan by a set of air gaps.
Using a damp or wet tea towel is a recipe for a ferocious steam burn.
