Head wraps can only be repaired with other head wraps. Unlike most clothing, they cannot be repaired by merchants because they have no value. However, this is negligible, since its condition does not affect its damage resistance (because it is already at the minimum).
Brock and Wild Bill (The Pitt add-on) sport the gray variant. This is also worn by the wastelander in the random encounter 'More Than Just Scrap'. This wastelander respawns every 73 in-game hours, and can be killed repeatedly for their gray head wrap, with no negative consequences.
The yellow/red variation is included in the game files of Fallout 3, but is not used in the base game. Midea in the add-onThe Pitt wears it. It can not be repaired by Merchants; but only by other head wraps.