I recently refolded my fabric, and I am very pleased with the result. It gave me a chance to really see what fabric I have.
My fabric is stored in a bookcase, and the smaller pieces just look smaller. I have my fabric sort of arranged by color, but I found that if I stacked it from dark to light, some of the smaller pieces just disappeared. So now similar colors are together, but not the real close colors. Then I have one shelf that is just groups of fabrics that I think I want together.
So far this arrangement has worked well for me. The main thing I did was refold it all, so that each piece of fabric is the same width on my shelf. (I folded from selvage to selvage, then in half the same way, and then in half the same way again.)