Originally Posted by e4
Boiling cooks the starch so that it swells - like making gravy. It may still separate a little bit, but usually not much. This actually works better than just using cold starch - usually gives a smoother, stiffer finish and doesn't flake as much. Letting the fabric set for a while will allow the starch to penetrate better. Just remember, bugs like starch so you really shouldn't store fabrics pre-starched unless you know you are going to use them fairly soon.
Boiling also helps the starch last longer because it sterilizes the water. When I make hummingbird feeder solution I boil the sugar and water for a few minutes, cool and pour into the cleaned-with-bleach feeder; it lasts for a week before it starts to mold, but if mixed with tap water it goes bad in a day.