Mine are sorted by material- so, cotton quilting fabrics have their space. Velvets, linens, silks, etc. that get used in my art quilting have their own spaces. I keep all my fabrics in those cheap plastic drawer units that you can get from Target--it helps keep the dust off and keeps them from fading in the sunlight. I use comic book boards that I cut down to fit in the drawers and wrap my fabric around those. They stand nicely on one edge with the fold side up so I can open any drawer and see immediately what I've got.
Within those general categories I store fabric first by quantity (ex. fat quarters have their own drawer, 1 yard cuts, 2 yard cuts, backing fabrics, all have their own drawers) and then by value-- For me its important to be able to quickly pull fabrics that are of the correct value for the effect I want. So, for example, I can open my 1 yard cut drawer and see at a glance if I'm running low on lights, mediums or darks. Because I store based on amount first and value second I always know immediately if I've got enough fabric in my stash for whatever project I'm planning--unlesss I've got the right values in the wrong colors LOL!
Rob